Just over a quarter of a billion pounds has been clawed back from landlords since HMRC’s Let Property campaign began eight years ago, it has been revealed.

The latest figure for the campaign were revealed by Financial Secretary to the Treasury Jesse Norman in response to a written question by shadow equalities minister Charlotte Nichols.

She asked whether HMRC would fund a more direct approach to tracking down private landlords who fail to declare rental income, rather than the current mostly voluntary system.

This includes the Let Property Campaign, which encourages landlords to come clean about undeclared rental income in return for a lower penalty, along with more aggressive ‘nudge letters’ sent out to suspected miscreant landlords.

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Non-compliance

“The Government is committed to reducing non-compliance in the tax system among all taxpayers, including landlords, and continues to give HMRC the resources they need to tackle the tax gap,” replied Norman.

“HMRC do not rely on voluntary disclosure from landlords and use a range of data and approaches to identify landlords with undeclared rental income.

“Since 2013-14, HMRC’s Let Property Campaign has prompted approximately 58,000 additional disclosures and raised an estimated £254 million in additional compliance yield for the Exchequer.

“Where landlords do not come forward to declare their rental income, after being prompted, HMRC take further steps including opening formal compliance interventions where necessary.”

Disclosures down

But the Let Property Campaign is not as effective as it used to be. Latest figures for 2020-21 reveal that there were 4,330 voluntary disclosures by landlords during the period, a 42% decrease on the previous year. Similarly, the tax yield from the campaign dropped almost 50% from around £34 million in 2019-20 to around £17 million in 2020-21.

“Taken together, the data suggests that the tax shortfall HMRC suspects exists among landlord taxpayers is likely accounted for by a high volume of low value discrepancies,” says Zena Hanks, a partner at accountancy firm Saffery Champness, which unearthed the data following a FOI request.

Read more about HMRC’s previous position on landlord tax compliance.


 

4 COMMENTS

  1. Making tax digital is coming down the tracks which will make it even easier for HMRC to try to catch people… But the declining yield figures suggest that most have already coughed up and therefore HMRC is fishing in an increasingly empty pond.

    That pond at the same time is evaporating, not from global warming but from govt persecution of investors.

  2. MTD will, the Govt says, make tax simpler, but the reality is that it will do anything but. It will add costs, bureaucracy, confusion and complexity. I use a spreadsheet to keep my tax records, which I created myself. It’s simple and it works, and I can do a year end tax return and calculate my tax charge and amount payable within a few hours, with no need to pay an accountant. MTD will require me to acquire and pay for new software, learn how to use it, learn how to integrate it with HMRC’s communication sytems, or pay some other parasite to do it for me. Industry bodies should be strongly arguing against it. It has the potential to waste huge amounts of landlord time and money which should be directed at looking after properties and tenants.

  3. Agree with John ! MTD is just another cost to landlords with maybe only 1 or 2 properties who declare their income honestly and up front without the need to pay anyone to do it for them. Also not good for anyone who is not good with technology. The government is just squeezing the life out of us whilst expecting us to fill the crater that is the lack of available housing

  4. I know it is never possible, but all legislation should aim to meet “the old Granny test.”

    If you need a professional to meet, let alone understand, legal requirements then there is something wrong.

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