40,000 landlords will receive letters from HMRC over the coming four months, demanding that they put their tax affairs in order.
According to the Daily Telegraph some 5,000 landlords have already received the letters, which give the recipient 30 days in which to arrange to bring their affairs up to date. Those who fail to do so could face fines or a criminal investigation.
The news follows reports that HMRC could ultimately target the majority of UK landlords over potential unpaid tax. It is estimated that there are around 1.4 million landlords in the UK, but just 500,000 have registered with HMRC.
Accountants have reportedly noticed an increase in HMRC attention directed towards landlords. Tax advisors Rita4Rent recently published copies of letters received by landlords during each stage of the notification process.
Meanwhile UHY Hacker Young report that the Revenue is looking more closely at housing benefit payments made to landlords, in addition to the Land Registry and electoral roll. Hacker Young partner Mark Giddens told the Telegraph that HMRC wrote in April to letting agents asking for details of “everyone on their books.”
HMRC estimates that landlords underpay around £550m in tax every year.