Property News. From Moving In.

HMRC still on Buy To Let warpath, despite campaign flop - warning

There is a warning that the HMRC’s Let Property campaign, which received huge publicity and attention for some years, has so far had only very limited impact - and that the tax authorities are still to target buy to let as a result.

Accountancy firm Saffery Champness, using a Freedom of Information request, has discovered that the Let Property campaign has so far led to disclosures from only three per cent of the landlords originally anticipated. 

Back in 2013 the then-coalition government launched Let Property estimating that up to 1.5m landlords had underpaid or failed to pay up to £500m in tax in 2009 and 2010 alone

Those originally targeted included people who own more than one property, specialist landlords who rent to students, people with holiday lets and those who let HMOs.

In the five years since the campaign started, just 35,099 people have made voluntary disclosures to HMRC, only 2.3 per cent of the individuals originally identified, while of the estimated £500m in underpaid taxes a mere £85m has been recovered.

As a result, says the firm, the tax authorities still have work to do.

“From the outset, the Let Property Campaign was always looking much more widely than just traditional landlords. It also targets those who may have become accidental landlords – such as those with holiday lets or multiple occupations” says James Hender, head of private wealth at Saffery Champness.

“The tax system is becoming more complex and the burden is shifting further towards the taxpayer: this inevitably means individual mistakes and misunderstanding can happen. Looking at the data from the FOI, of the large number of tax payers who stated that they had either failed to notify HMRC of their original liabilities or hadn’t taken reasonable care, many would likely have been unaware that they owed anything at all" he continues.

“According to HMRC’s estimates there are clearly many more landlords who have additional tax to pay, but have yet to come forward. If this is the case, then these people would be well advised to contact the taxman sooner rather than later. 

“HMRC have been tightening the net on non-compliance and there are increasingly few opportunities for taxpayers to mitigate the risk of an investigation. This campaign is one of the few that remains open but, with the Common Reporting Standard online and the Failure to Correct penalty system in place (both of which will affect owners of properties overseas) it is likely to remain that way for only so long.”

https://www.lettingagenttoday.co.uk/breaking-news/2019/3/hmrc-still-on-buy-to-let-warpath-despite-campaign-flop--warning

..............................................................

Original Source: Letting Agent Today.

Original Author: Graham Norwood.

...............................................................