HMRC has become increasingly concerned about the amount of unpaid tax in this sector so it started to target over 4,000 landlords it discovered via its Let Property campaign.
"It's using something called Connect AI!"
This is a cloud-based programme that flags potential targets by cross-referencing data from sources such as the Land Registry, Zoopla and Rightmove. HMRC can see if a property is rented through the lists it receives from letting agents.
When it's a smaller landlord, this information can also come from the Tenancy Deposit Scheme, which is a legal requirement for all renters and landlords, meaning it is almost impossible to rent a property without HMRC knowing about it.
A number of overseas landlords who own buy-to-lets have also been targeted. So far, 248 ex-pats came forward to admit underpayment of tax on rental income last year and it is very possible that underpaying landlords could face severe consequences.
"Some landlords may simply be unaware!"
However, it is possible that some buy-to-let landlords may simply be unaware of their tax liabilities on income earned from rentals. Anyone who is worried should seek professional tax advice to prevent an investigation and potential penalties.
HMRC are returning to full strength post-pandemic, and many more landlords could soon be targeted.
Until next time ...
Would you like to know more?
If anything I've written in this blog post resonates with you and you're worried about your own buy-to-let tax liabilities, it may be a great idea to give me a call on 01908 774323 and let's see how I can help.
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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