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Many overseas landlords confessing to tax avoidance - claim

The number of overseas landlords admitting tax avoidance has risen 65 per cent in five years according to an accountancy firm.

Moore, which has analysed tax data, says 390 overseas buy to let landlords admitted to HM Revenue and Customs they have not been paying the right amount of tax last year - that’s up from 237 in 2015/16. 

A total of 1,502 overseas landlords have admitted that they have been underpaying tax over the last five years.


Moore says these landlords, many of whom are foreign-based expats rather than wealthy investors from overseas, let out property in this country and are coming forward in response to HMRC’s Let Property Campaign.

Luci Parry, a partner at Moore, says: “The ability of HMRC to conduct cross-border investigations quickly and easily has overseas landlords running scared – prompting many to come forward.

“Many overseas landlords who have fallen behind on their tax payments do not want to get embroiled in lengthy, costly investigations. Especially given many investigations into suspected unpaid tax result in heavy penalties and potentially criminal charges.

“The tax affairs of buy-to-let landlords has been a key area of focus for HMRC and it shows no signs of letting up. HMRC’s latest initiative involved bulk mailing thousands of warning letters to landlords asking them to declare their income.”

Moore warns that HMRC has become increasingly effective in identifying landlords who are not paying the right amount of tax on their rental income. 

To do this, HMRC has been using global data to obtain bank statements for foreign bank accounts used by overseas landlords to see what income they are receiving, and has been reviewing Tenancy Deposit Schemes to cross reference landlords against those declaring rental income.

The penalty for undeclared rental income is up to 100 per cent of the amount of tax HMRC believes is owed. If a landlord comes forward and makes a disclosure they are likely to face lower penalties.

Parry adds: “There is a clear-cut case for coming forward and declaring income as HMRC is likely to be more lenient in the penalties it issues. If you wait until HMRC finds you have unpaid tax then the punishment will be much harsher, in some cases by several multiples.”

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    Tax avoidance is legal. Tax evasion is not

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    Tax avoidance is indeed legal . But it is unethical. Loopholes in the regulations are not there to be exploited. People should pay their dues, not exploit loopholes.


    Does that include paying rent as agreed, or is rent evasion not unethical?

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    Sigh. The point that I was making is that the article incorrectly talks about tax avoidance, when it should be tax evasion - lazy and sloppy journalism. As a rule I avoid discussions about tax evasion - it's all legal so where do you draw the line? I have a stocks and shares ISA in order to avoid paying additional taxes on dividends and gains. Am I exploiting a loophole? You bet, along with millions of others

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    Thats exactly the case Doug. Tax Avoidance is legal & ethical, Tax Evasion can get you put in jail.
    Anyone that says Tax Avoidance is unethical shows their limited knowledge & understanding also ask them if they have ever bought items from Duty Free!

    Oh for all those that disagree I'm sure when you get your tax demand from your accountant you ask to pay a bit more so you feel better.


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