A prominent accountant is warning that the upcoming Renters Reform Bill, when it becomes law, will be used by HMRC to extract maximum tax from landlords.

Aatif Malik says one particular measure in the Bill – the creation of a digital private rental property portal – will “significantly reshape the landscape of tax on rental income, profoundly impacting resident and non-resident landlords and investors.”

The government anticipates launching the Property Portal in Autumn 2025, assuming the Royal Assent of the Renters (Reform) Bill is granted in early 2024. 

Malik says the portal is designed to streamline the communication process between landlords, tenants, and local councils, creating a one-stop shop for all parties within the private rental sector. 

Under the impending legislation, it will become mandatory for landlords to register themselves and their properties on the portal; failure to comply with regulations may result in significant financial penalties. 

And he warns that: “Repeated breaches or serious offences may prompt an investigation by the Fraud Investigation Service, a specialised division within HMRC that deals with cases where the loss to the exchequer exceeds £100,000.”

Malik describes the Bill as “a clarion call for landlords to ensure their financial and tax affairs are fully compliant. Waiting for a nudge letter from HMRC under the Property Let Campaign or Undisclosed Income could lead to penalties, affecting cash flow in an already economically precarious environment.”

The Renters (Reform) Bill also outlines the continuation of selective licensing, with potential new areas for licensing to be identified via the portal. Malik warns that failure to abide by licensing requirements can also add to the risk for landlords, especially if they have yet to declare their income from property. 

“Preparation is the best defence. The current climate’s economic challenges mean landlords must understand and fully meet their obligations under the new reforms” he concludes.