Tax man in unfair crackdown on landlords

The tax man is cutting corners in a crackdown on landlords and unfairly pursuing those who have properly declared their tax, claims an accountant.

HM Revenue and Customs is running several high profile compliance campaigns targeting landlords across the country, including London and the North West.

However, Mike Down, of accountants Baker Tilly, with 26 offices throughout the country, has slammed HMRC for launching investigations without evidence against innocent landlords.

He alleges HMRC is requesting financial information from landlords based on housing benefit and council tax data from local councils – but is failing to cross check the information against tax returns to confirm if the landlord has correctly declared any taxable income.

Letters from HMRC are demanding details of all properties owned by landlords, tenancy agreements, rent and expenses.

“Clearly it’s good to see HMRC cracking down on tax cheats, but we do have real concerns over what appears to be the non-risk-based approach of this campaign,” said Down.

“What’s even more shocking is that telephone staff at HMRC are openly admitting that the probing letters are being issued without the department having first checked whether the landlord is in fact fully declaring the rents on their annual tax returns.“

“Surely it’s time HMRC were more careful with their precious resources and invested time in carefully checking third-party information before sending what might be viewed as scarily aggressive letters to those who are fully tax compliant?”

HMRC is relaunching a scheme to visit 50,000 businesses a year to check financial records and has employed hundreds of compliance officers to manage tax inquiries across the UK in a bid to recoup ‘missing tax’ of around £9 billion a year.

Accountants have long known that HMRC has special landlord units looking at property tax cases – including capital gains tax owed by landlords who have sold investment property in recent years.

Information comes from local councils and the Land Registry.


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