HMRC will get a tax ‘gold mine’ with the new landlord database

HMRC will get a tax ‘gold mine’ with the new landlord database

0:02 AM, 23rd May 2023, About 11 months ago 24

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The Renters’ Reform Bill has unveiled a new database that could turn into a tax ‘gold mine’ for HMRC to chase after landlords who haven’t been paying their taxes, one firm warns.

Accountancy and business advisory firm BDO say the new private rented sector database will have a record of all landlords and their properties under residential tenancies – providing HMRC with an easy way to track down unpaid tax.

According to BDO, the Bill doesn’t clearly state that HMRC will have full access to all the information submitted as part of the registration process, unlike the equivalent provisions for the Register of Overseas Entities.

However, landlords should assume that the tax authorities will be utilising the publicly available data for compliance checks.

‘Holds significant information on taxpayers’ financial affairs’

BDO’s head of tax dispute resolution, Dawn Register, said: “HMRC already holds significant information on taxpayers’ financial affairs.

“The introduction of a new private rented sector database will leave few places to hide for landlords who don’t comply.

“Any landlords who don’t currently pay the right amount of tax would be well advised to bring their UK tax affairs up to date before the register is introduced.”

She added: “In addition to providing peace of mind, making an unprompted disclosure should lead to lower tax-geared penalties for errors, compared to rectifying mistakes after HMRC gets in contact.

“It will also help to mitigate late payment interest – which is currently at a 14-year high of 6.75% per annum and due to rise to 7% from 31 May.”

Declaring their rental profits and gains on sale

HMRC is determined to ensure that landlords are paying their dues and declaring their rental profits and gains on sale.

It is encouraging landlords who have tax mistakes to come clean voluntarily by using the Let Property Campaign or other disclosure processes that are part of HMRC’s Digital Disclosure Service.

Landlords also need to be aware, BDO says that more property data will soon become available after the Land Registry implements the new requirements in the Levelling-up and Regeneration Bill.

This means that HMRC can combine any new data from the landlord database with its already extensive database of more than 55 billion pieces of data.


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Comments

Stella

16:08 PM, 27th May 2023, About 11 months ago

Reply to the comment left by GlanACC at 27/05/2023 - 14:53
HMRC can get there hands on information from many sources.

For example it was widely reported that Newham council passed on the details of all the licenced landlords in their borough to HMRC which helped them secure their blamket licencing scheme for a further 5 years.

Luckily I pay my taxes but I do not remember Newham asking me if it was okay for them to give HMRC this information.

Rennie

10:50 AM, 31st May 2023, About 11 months ago

Reply to the comment left by Badger at 27/05/2023 - 13:37
Even if they don't have access now, which i doubt, they will have access and control of everything once the central bank digital currency comes in. After that we are all stuffed

GlanACC

8:51 AM, 1st June 2023, About 11 months ago

And for thoe of you thinking of going down the airBnB route, HMRC now receives lists of UK airBnB properties and the income generated by them each year, although I do believe the first £1000 of income is allowed tax free.

Tony Phillips

5:08 AM, 3rd June 2023, About 11 months ago

Reply to the comment left by Rob Thomas at 23/05/2023 - 09:49
There are too many reasons! I'm.67 now and worked my fingers to the bone to buy a home and pay for it. I really do mean that. 40 years ago I lied and cheated to get on the property ladder. Because otherwise I would not have been allowed to buy/own my home.

I started with nothing, zip nada. And the system doesn't like that. I struggled big time for years to pay my mortgage. I faced eviction for arrears at least five times..in the high court!

And had to pay their legal fees! I had a young family at the time as well. They had zero compassion, didn't listen and just said PAY or we'll take it away! Total unsympathtic B@stards! At one time (1990s) I had 15 pence in my pocket and had to eat old army rations (I served for 12 years) to ease my hunger

Not once did the govt or hmrc help...I was actually starving to keep up my mortgage payments. Along the way I managed to buy a second property which I rent out....I went without to finance that.

Not a single holiday in 25 years, old cars abd renovated the property myself. AND NOW? THEY WANT TO TAX ME??? F*** RIGHT OFF

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