Thousands of landlords are receiving tax demands from HM Revenue & Customs (HMRC) after their names were handed over by tenant deposit schemes.
Tax investigators are busy comparing lists of landlords held by the schemes against self-assessment tax returns to identify property people who have not declared rental profits.
The letters are sent under the guise of the Let Property Campaign, which is a scheme which allows landlords to declare rental profits in return for reduced penalties.
The letters says HMRC is comparing data with tax returns and the letter has identified the recipient as a landlord who may be liable to tax on undeclared income.
The information also identifies rental properties that may have been sold and subject to capital gains tax.
?This campaign gives landlords a chance to bring their tax affairs up to date on the best possible terms,’ said an HMRC spokesman.
The letter also sets a 30 day deadline on sending a response.
?The letter is basically a warning from HMRC telling landlords that they know they have properties and have not declared any rental profits on their tax returns,’ said Amanda Sims of Yardleystar Accountancy, a property tax specialist.
?I have had several calls about these letters and HMRC have told me that they have thousands of names from tenant deposit protection schemes confirming who landlords are and the addresses of their rental properties.
?One client has been asked about rental income from eight buy to lets going back nearly 10 years.?
HMRC is known to have a sophisticated software system called CONNECT that profiles taxpayers, including landlords.
Other property data going into the system to identify landlords with suspected undeclared income is coming from letting agents, local council housing benefit records and buy to let mortgage lenders.
Landlords who receive a Let Property Campaign letter should take immediate advice from a tax adviser.
More information about the Let Property Campaign
… LandlordZONE.
Article courtesy of LandlordZONE””
