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Following the explosion of the private rental sector in recent years, HMRC has been cracking down on landlords who evade their tax responsibilities, deliberately or otherwise.
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Lots of Tax Revenue for HMRC
As a result of the increase in the number of people investing in the buy to let sector, HMRC has been targeting landlords in an attempt to claim back some of the underpayment. Many inexperienced landlords and property investors are unaware of their tax obligations, in particular capital gains tax, and as such are not declaring any profits made.
So far, HMRC strategies appear to be working very well. Recent figures obtained by a leading firm of accountants show that tax revenue is up by 24% on the previous year – around £136 million compared to £110 million in 2013-14.
“There are a significantly greater number of buy to let landlords and private property investors in the UK than was the case 10 years ago, and they make tempting targets,” says Mark Giddens from accountancy group, UHY Hacker Young.
Have You Registered with HMRC?
Less than half a million taxpayers have registered a second property with HMRC, but the tax man believes the true figure is far higher. Around 40k letters were sent to suspected landlords last year, warning them that if they didn’t come clean about their earnings, they would be fined.
If you have yet to declare your buy to let earnings with HMRC, make sure you do so as quickly as possible – the January 31st deadline for online tax returns is fast approaching!
