HMRC Snooping on Landlords via letting Agent

by Readers Question

12:50 PM, 22nd September 2014
About 4 years ago

HMRC Snooping on Landlords via letting Agent

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HMRC Snooping on Landlords via letting Agent

It would seem HMRC has started to crosscheck declared rental income, in bulk, via letting agents. It does seem a little strange as those most likely not to declare on tax returns are unlikely to use a reputable letting agent.

I’ve had a rental property for 8 years & this is the first time I have become aware of such tactics following receipt of a bill for £18 for the privilege of my letting agent completing the return I knew nothing about.

Steve.

Text of Letter from HMRC to Letting Agent below:

Notice under Paragraph 1, Schedule 23 to the Finance Act 2011 for a data-holder, as defined in paragraph 18, to provide relevant data defined in regulation 16 of the Data-gathering Powers (Relevant Data) Regulations 2012 (Year Ended 05/04/2014)

Paragraph 1 of Schedule 23 to the Finance Act 2011 allows an officer of HM Revenue and Customs, by notice in writing, to require a relevant data holder to provide relevant data. For the purposes of paragraph 1, Schedule 23 to the Finance Act 2011:
– you are a “relevant data holder” as defined in Paragraph 18 of Schedule 23 to the Finance Act 2011 and;
-the data described in the schedule below is “relevant data” as defined by regulation 16 of the Data-gathering Powers (Relevant Data) Regulations 2012 (SI 2012/847)

Therefore take notice that under the above provisions I hereby require you by 10/09/2014 to make and deliver to me at the above address, using the means described in the enclosed letter, a return of data of the kind specified in the schedule below for the period shown in the schedule.

Schedule
Gross rents which you have obtained from tenants of let property on behalf of their property landlords for the period 06/04/2013 to 05/04/2014.

In respect of each landlord I require you to give the following particulars in your return:
– the name of the landlord for whom the rent was collected;
– the landlord’s address;
– the amount of the total gross rent due from the tenant for the landlord for the period shown in the notice;
– the address of the let property to which the rent relates.inspector



Comments

Mark Alexander

13:01 PM, 22nd September 2014
About 4 years ago

This is indeed an interesting tactic being employed by the HMRC. The very fact that people are talking about it is likely to result in more income being declared. I have to say, I think this is a good thing, why should I pay more tax because others don't pay their fair share?
.

Adrian Jones

13:23 PM, 22nd September 2014
About 4 years ago

Reply to the comment left by "Mark Alexander" at "22/09/2014 - 13:01":

I totally agree with you Mark. I just hope they are as diligent in their efforts with Starbucks, Amazon etc

Ian Ringrose

13:57 PM, 22nd September 2014
About 4 years ago

This is nothing new; most agents just do the return without charging the landlord.

HMRC just seem to have got better at tracking down small agents over the last year.

Mark Alexander

14:38 PM, 22nd September 2014
About 4 years ago

Reply to the comment left by "Adrian Jones" at "22/09/2014 - 13:23":

Hi Adrian

I don't have a problem with what Amazon and Starbucks are doing. The politicians may want us to think it is immoral but we all have the legal right to structure our tax affairs to pay the least amount of tax. Jimmy Carr has also had a lot of negative press over this but good luck to him I say. He's doing nothing wrong.

Tax evasion is illegal, hence I have no sympathy for the likes of Ken Dodd and Lester Piggott, but tax avoidance is our right and I applaud anybody who pays no more tax than they need to pay.

I have been called a capitalist XXXXXXX on many occasions for thinking this way but I am what I am and I'm proud of it.
.

Adrian Jones

15:21 PM, 22nd September 2014
About 4 years ago

Reply to the comment left by "Mark Alexander" at "22/09/2014 - 14:38":

Thanks Mark. I fully appreciate your comments. However, if more tax revenue is the name of the game, let the Government and HMRC have a system which ensures everyone pays a fair share.

Yvette Newbury

15:24 PM, 22nd September 2014
About 4 years ago

I recall our letting agents sending us a letter stating that they had been asked by the Inland Revenue to pass across similar details and information on all payment made by tenants and the landlords they relate to...but that was in 1992!

Mark Alexander

15:25 PM, 22nd September 2014
About 4 years ago

Reply to the comment left by "Adrian Jones" at "22/09/2014 - 15:21":

Clearly they don't, otherwise Starbucks etc. would pay a lot more tax. Can't blame them for playing by the rules though can we?

Better still, reduce tax rates to encourage more businesses choose to base their operations in the UK. More businesses means more tax revenue, more employment and a better economy - it worked for Hong Kong! 🙂
.

Mark Crampton Smith

15:49 PM, 22nd September 2014
About 4 years ago

We have been asked for this form to be completed for the last 8 years.......however we have never charged our clients for completing a data return we are obliged to provide HMRC by statute...... It would be a bit like you charging one of your tenants for filling in your tax return?

John Daley

14:59 PM, 23rd September 2014
About 4 years ago

I have seen a report from HMRC recently that estimates that PRS landlords underpay tax ( or perhaps under declare income) to the value of £5 bn per year.

Given that is is now in the public eye I would imagine that they will be trying a lot harder to collect this tax.

Onslow Clough

15:26 PM, 23rd September 2014
About 4 years ago

I agree with Mark, with regard to fairness. Clearly the obvious answer is everyone to declare the correct amount of income and there is nothing to worry about.

I, or rather my wife is absolutely straight down the line when it comes to declaring our revenue. The power the HMRC have is scary and they have long memories.

Of course if you really did want to defraud the Revenue you just wouldn't use letting agents.

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