by Steve Sims
14:42 PM, 21st February 2011, About 11 years ago 2
Guest Blog provided by Steve Sims, author of “Understanding And Paying Less Property Tax For Dummies”. Steve and his wife also have a boutique accountancy business which specialisis in providing taxation advice and accountancy services for property investors.
The taxman is warning buy to let landlords that they need to declare rental income from property they own or run the risk of fines.
From April, HM Revenue and Customs has new powers to check financial records and plans to visit 50,000 small business, including property investors, every year to make sure they are paying any tax due.
This is a huge change in tax law, as currently the taxman only has the power to check financial records after a tax return is submitted
From April, HMRC will crackdown on businesses they suspect of cheating on tax – especially those collecting payments in cash – before the submission of tax returns.
Landlords that fail to keep good financial records or those that have not made tax returns face fines of up to £3,000 plus penalties and interest on tax owed.
Brian Redford, HMRC’s Acting Director, Business Customer Unit, said: “In these tough times, keeping good records makes sound business sense.
“It may seem like a challenge, particularly when you’re starting out, but keeping good records will bring real advantages to your business. Get a proper system in place and you’ll not only be confident that you are paying the right tax, but you’ll keep up-to-date with how much you owe suppliers and how much you are owed.”
Landlords should take this warning as a wake up call and put their financial and tax affairs in order as soon as possible, because the taxman could come knocking any time without warning after April 5.
HMRC have a track record for updating guidance and issuing warnings before kicking off tax campaigns – and do not accept excuses from taxpayers who fail to put their affairs in order after the media blitz.
If you need a property business check or help keeping financial records and preparing tax returns, a link to Steve’s web-site can be found HERE.
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