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Tax-evading landlords each underpaid thousands last year

An accountancy firm claims that buy to let landlords who admit evading tax on their rental income have underpaid to HMRC by some £4,480 last year.

UHY Hacker Young says this average under-payment is some 72 per cent higher than the under-payment a year earlier, which was typically £2,610.

Now the accountancy firm says the long-standing HMRC ‘Let Property Campaign’ is proving itself by encouraging some evading landlords to come forward.

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Clive Gawthorpe, partner at UHY Hacker Young, says: “When landlords who are hiding income get a warning letter from HMRC, they realise that HMRC is closing in on them and they can no longer hide.”

“HMRC is giving landlords a chance to confess and in return, it will lessen the penalties imposed. This will be the most favourable outcome for landlords and any with undisclosed income ought to take that opportunity before it’s too late.”

“If a landlord decides to come forward under the campaign, it’s better to do it with professional advice, particularly if their tax affairs are complex. This will be key in helping avoid any mistakes and the possibility of further investigations by HMRC.”

The Revenue’s Let Property Campaign started seven years ago and encourages buy to let and holiday home landlords to confess to unpaid tax bills. 

Seven years ago HMRC claimed some 1.5m landlords were underpaying tax.

Gawthorpe continues: “Our advice is not to wait for HMRC to come calling. The taxman is likely to show a degree of leniency to those who come forward and declare unpaid taxes. The alternative is potentially big fines and possible criminal prosecution.”

In 2019 HMRC found 11,129 landlords either under-paid or failed to pay income tax on rental income compared to 8,704 in 2018.

The Revenue reclaimed £44.7m in tax from landlords last year, up from £32.8m the year before. 

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

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    As in all trades some might, all rents that I receive are recorded, as are all costs, my accountant checks them, then files them with HMRC on my behalf, it pays to use a good established firm of accountants that are trusted by HMRC , I also have tax investigation insurance, £60 per yr each for my wife and myself, not had to claim on it yet, however a friend of mine did a couple of yrs ago and it was invaluable.

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    Most 'Landlord Today' daily news items result in quite a few 'Join The Conversation' comments from readers. A lot of these talk about rogue tenants, bad tenants, defaulting tenants, untrustworthy tenants, etc. etc.
    And now 'Landlord Today' posts a news item about the thousands of landlords not paying their dues in tax. And apart from Andrew, who rather defensively wants people to know he's paying all his tax when no-one's even accusing him of anything, - not a single comment or reply from anyone. Just silence. I find this very interesting. And possibly revealing..........
    (By the way, I pay all my dues too.)

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    I think you will find most if not all on here pay their tax properly and honestly David.

     
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    Hi David, that's very presumptuous of you and the Accountancy Firm making this allegation, my Tax Returns are always done, tax paid and didn't hold on to the money for the 6 months that Revenue offered to all tax payers this time either, I could have put it in the Premium Bonds for 6 months like some may have done. This accountancy if they know all this they must know who the people are ?, although HMRC suggests there are 1.6m LL's with only 500t making a tax return so I'll take that as read don't know any different but wouldn't mind all tax payments to be public knowledge and also all Benefit Claimants payments to be public knowledge especially as its tax payers money. I suppose the ghost LL's on not going to appear in this platform.

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    Hi Michael. I did not make this allegation. It's the HMRC who stated this. One could ask them the source of their figures, and I'm sure they'll provide it. I'm just commenting on their worrying statement. (And well done for paying all your due tax.)
    Hi Andrew. What's your evidence for your comment that "most if not all pay their tax properly and honestly"? Fact-check needed before one can state this in a public forum like Landlord Today.

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    OK David, granted but I take issue with the bit about, Rogue Tenants, bad Tenants, defaulting Tenants & untrustworthy Tenants as an exaggeration. I actually like my Tenants, can I substitute and replace the word Tenants in this instance to Rogue Regulators instead.

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    Well people. Are not gonna be stupid enough to brag that they pay no tax now surely .
    Seven years ago 1.5m landlords were underpaying tax now it’s 11,129 underpaying. I’d say that’s a result

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