HMRC is targeting residential landlords with ‘nudge letters’

HMRC is targeting residential landlords with ‘nudge letters’

10:57 AM, 14th November 2022, About 2 years ago 20

Text Size

HMRC is targeting residential landlords in its latest ‘nudge campaign’ that it suspects are not declaring their full rental income, warns tax advisers Kreston Reeves.

The campaign comes in advance of Jeremy Hunt’s first Autumn Statement and rumours of a further attack on residential landlords with higher rates of Capital Gains Tax (CGT) on property disposals and higher rates of National Insurance.

George Guilherme-Fryer, a director in the firm’s tax disputes team, said: “These nudge letters are widely targeted at individuals or businesses based on information received, primarily from other governmental departments, banks or, in this case, the tenancy deposit scheme.

“Landlords in England are limited to taking a five weeks’ deposit for new and renewed tenancies with rent under £50,000 a year or up to six weeks if the annual rent is £50,000 or more.

“As most landlords take the maximum deposit, it is not difficult for HMRC to calculate the expected rental income which should be included in a tax return.”

‘HMRC will assume an approximate rental income’

He added: “For example, if the deposit held with the tenancy deposit scheme is £1,000, five weeks of £200, then HMRC will assume an approximate rental income of £10,400 annually, or £200 per week.

“These latest nudge letters tend to include a statement saying that HMRC has received relevant information, suggesting the landlord review their tax position, and including a suspiciously simple certificate of tax position to be completed and returned.”

Mr Guilherme-Fryer highlights that the letter will not take into account vacant periods or reductions in rent and will often mean that no action is required.

No obligation for a landlord to respond

However, he says that there is no obligation for a landlord to respond or to sign the certificate of tax position.

Mr Guilherme-Fryer warns: “But landlords are advised to review their tax position if such a letter is received to identify if any disclosures are needed.

“If they are ignored and it is later found that tax is due, it may lead to an investigation and potentially a criminal prosecution.”

Share This Article


Claire Smith

17:15 PM, 14th November 2022, About 2 years ago

HMRC try to suggest that they have knowledge of income in the hope that taxpayers who are cheating will release other information about what they are hiding. Fair enough if people are cheating, but not for those who are innocent. My father died before we were able to find out what the hell they were going on about as we knew that he had no extra income. If they had bothered to check their files, this was an issue that had been answered a few years before (he charged the business the net amount rather than taking insurance commission.)
My mother's phone call to the boss of the local tax office after my Dad's death included the comment, "You have hounded an innocent man into a box."

david porter

17:20 PM, 14th November 2022, About 2 years ago

There is no better way to find yourself in trouble than to cheat HMRC.


18:04 PM, 14th November 2022, About 2 years ago

After completing a tax return online does HMRC send out a notification that they've received the completed form ? Immediately after submitting my return I was informed online of my tax amount . I just wondered if they informed us by post that everything is completed.


17:47 PM, 15th November 2022, About 2 years ago

Would information provided by Tenancy Deposit Scheme be it HMRC or anyone else be in breach of Data Protection Act?

Anna Zanesco 🎪

10:06 AM, 16th November 2022, About 2 years ago

This doesn't take into account HMO managers either. My husband has several houses that he manages but doesn't own and he registers the deposits as the official manager. He doesn't see anywhere near the amount of money received as rent.

Louise Clarke

8:48 AM, 19th November 2022, About 2 years ago

I know a landlord who doesn't even give tenancy agreements for that reason so he doesn't pay tax


9:53 AM, 19th November 2022, About 2 years ago

Reply to the comment left by david porter at 14/11/2022 - 17:20
Unless your really rich of course then it doesn't seem to matter.


9:59 AM, 19th November 2022, About 2 years ago

Reply to the comment left by PH at 14/11/2022 - 18:04
You normally get an e-mail immediately to confirm you have sent the form and your tax amount is normally calculated before you send it.
As for the postal aspect this depends on how you have set up the account.

Anne Nixon

10:52 AM, 19th November 2022, About 2 years ago

Historically I have always received nudge emails, even though I use a chartered accountant to submit everything, use letting agents to manage things and my income varies little year on year.
I did think it was a bit pointless but I assumed it was just something they did with all landlords and perhaps a little 'we know where you are so watch your step' kind of message!


14:22 PM, 19th November 2022, About 2 years ago

Reply to the comment left by John at 19/11/2022 - 09:59
Since I submitted my return I've had text messages and emails reminding me to send in my tax return but I think these are just standard. I did immediately receive my tax amount once I hit the 'submit' button and then a very quick message popped up about re-directing me to another page but it was that fast I didn't get chance to read it. I think I'll contact them again just to make sure they're satisfied.

1 2

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now