Home.co.uk
Home.co.uk

News: Landlords facing tax shocker'

Tue, 29 May 07

Landlords who fail to declare their income or claim too much tax relief could face a nasty bill from the taxman...

HM Revenue & Customs has identified 80,000 landlords whose paperwork is not in order and could owe the Government money, according to The Times.

Property owners will be forced to cough up in the latest drive to boost balances at the treasury, the paper said today.

Because the taxman can claim back unpaid money from up to six years ago, some landlords could be forced to sell up.

But an HM Revenue & Customs spokeswoman dismissed the claims as "scaremongering of the worst order" and said landlords would not be singled out.

She said: "Claming back tax is part of our function. We would not be doing our function if we were not. "It is not just about targeting landlords. We carry out over 30,000 investigations a year."

‘Ghost’ landlords targeted

The issue of correctly taxing landlords was raised at a meeting of accountants, tax experts and HM Revenue & Customs last week.

The campaign will target "ghost" landlords who have failed to declare themselves as property owners, The Times reports.

It will use information from banks, tenants and letting adverts to find those evading their tax responsibilities, the paper says.

A spokesman for the Treasury said: "The allegation that the Government is singling out landlords for tax liabilities is complete and utter nonsense.

"The truth of the matter is that officials regularly meet with a variety of stakeholder groups to understand their needs and answer their questions about the tax system.

"Suggestions of any other motives for these meetings are totally untrue."

BTL continues to ‘explode’

The discussions came as the UK's buy-to-let market continues to explode in size with one million more homeowners looking to rent out a second property by 2010.

Research by market analyst Mintel released last month said there are currently around two million people in the UK who own a second home.

The firm said of those, half - representing around 3% of all homeowners - were buy-to-let landlords.

Research also indicated that the number of buy-to-let mortgages is expected to reach 361,000 this year - up almost 10% on last year's figure.

Buy-to-let landlords must pay tax on the rent they receive from the property or a capital gain made on its sale.

But they can also claim tax relief on the cost of managing the property, and in some cases on the mortgage interest they are charged.

Meanwhile, an acute shortage of houses is driving the property boom as developers continue to build unwanted flats, The Daily Telegraph reported.

The price tag of family houses has increased at eight times the rate of a new flat since 2000, according to Land Registry figures.

Michael Gove, the Tories' housing spokesman, told the paper: "Government housing rules have led to a 'pile 'em high' approach to development which has seen us getting flats rather than family homes.

"We know the primary demand is for family houses but because of the planning system there is a lack of supply."

Back to: News Index