The taxman is seeking powers to triple the amount of tax it raises from Britain’s 700,000 landlords.
HM Revenue & Customs last week proposed measures to force lettings agents to hand over the names and addresses of all landlords on their books, past and present.
The move would make it easier for investigators to identify buy-to-let investors who are failing to pay tax on their rental income or on capital gains when they sell a property.
The Revenue’s powers are limited at present – it can compel agents to disclose only details of landlords who use an agent to receive rent. However, changes outlined in a consultation paper published on HMRC’s website last week could net thousands more. All landlords who have paid a fee to a letting agent for finding a tenant would be vulnerable to disclosure, even if they are no longer on its books.
Peter Bolton King, chief executive of the Association of Residential Letting Agents (Arla), said: “There are vast numbers of landlords that use an agent to find a tenant in a ‘let-only’ arrangement. While this push by the Revenue has the potential to catch a lot more landlords out, it will also create a lot more work for agents in terms of their record-keeping.”
The government estimates that 10% of lettings agents’ clients are on an “intro-duction-only” basis. Nearly all buy-to-let landlords use a letting agent at some stage, according to Arla.
