Holding your umbrella upside down will not keep off the reign of the taxman

by Mary Latham

11:12 AM, 6th March 2012
About 7 years ago

Holding your umbrella upside down will not keep off the reign of the taxman

Make Text Bigger
Holding your umbrella upside down will not keep off the reign of the taxman

-By Guest Columnist Mary Latham-


Landlords may be invisible but their properties are not and neither are their tenants, especially if they are among the increasing number who rely on benefits to pay their rent.

Following a meeting of the Homestamp consortium this week, I was standing on a busy street outside of a small shop talking to one of my colleagues who is an officer with one of my local authorities. Our conversation was about how we could get more landlords to work with the authority to provide homes and reduce the number of people on their homeless lists. We were soon joined by the owner of the shop who is a landlord and works with this authority to provide decent homes, so we asked him why he thought landlords were not coming forward.

He told us “They are afraid that if they work with the authority the tax man will find out how much rent they are getting, this is why they don’t register their deposits or get EPCs either.”

“Do they think that they are invisible?”  I asked.

“They have been up to now” he said. “So they don’t accept tenants on benefits?”  “Yes they do!” We all laughed.

How can these landlords think that they can receive their rent through the benefit system and remain invisible? How can landlords think that when the name on the utility bills and Council Tax are different to the name at Land Registry no one will notice. Road Tax is a fine example of how much information is now shared.

How can landlords think that holding their umbrella upside down will keep off the rain?

Did they miss these warnings?

HMRC taskforce targets landlord tax dodgers

The team looking at property investors dodging tax in London is expected to yield up to £7 million in unpaid tax plus penalties and interest.

Another group in the North West has uncovered a number of ‘ghost’ landlords, referring three tax evasion cases for criminal prosecution.

The task forces are part of a wider HMRC initiative to clamp down on tax evasion, avoidance and fraud that aims to raise the government around £7 billion a year.

Read the full story here

HMRC crackdown: Landlords with more than three properties in the North West and North Wales are being targeted

Mike Wells, HMRC’s director of risk and intelligence, said: ‘These taskforces will come down hard and fast on those who have chosen to break the rules and deliberately evade the taxes they should be paying. Honest businesses, however, have absolutely nothing to worry about.

‘HMRC is clear – if you deliberately seek to evade tax we can and will track you down and you’ll face not only a heavy fine, but possibly a criminal prosecution as well.’

Army of 2,200 extra tax inspectors to target the rich

Taskforces are specialist teams that undertake intensive bursts of compliance activity in specific high risk trade sectors and locations across the UK.

They were created as a result of the Government’s £900million spending review re-investment to tackle tax evasion, avoidance and fraud from 2011/12, which aims to raise an additional £7billion each year by 2014/15.

The HMRC is planning 12 taskforces in 2011/12, with more to follow in 2012/13.

Grant Summers, tax partner at Grant Thornton, said: ‘HMRC has been using its information powers and researching industries to identify those that are more likely to harbour tax evaders.

‘These taskforces demonstrate HMRC’s warning that there is no hiding place for undisclosed income and gains and that it will clamp down very hard on anyone who does not have their affairs in order.

‘Failure to do so will run the very serious risk of prosecution when the designated taskforce identifies an anomaly.’

It hurts to write out that cheque every January but it would hurt a lot more to get a fine for the same amount or to spend time in one of Her Majesty’s salubrious establishments. Perhaps when we are all paying our taxes we will be one step closer to economic stability?

On the brighter side The Tax and Financial Transparency Bill will get its second reading on 9th March. “A  bill to require the Secretary of State to take steps to require banks, corporations and trusts to provide information on their status, income arising and tax payments made in each jurisdiction in which they operate; and for connected purposes.”

I expect HMRC will be busy when that bill receives royal assent!



Comments

9:41 AM, 8th March 2012
About 7 years ago

a stupid comment by a shop owner , people from my opinion do not wish to work with local authorities because it simply is unfavorable to them , they do not pay the market rent, the contracts they provide is not favorable to the landlord nor the tenant but to the local authority, it takes weeks before they see any money, the landlord has no control on who is in their property, in many instances the landlord is not renting to the local authority but the tenant ,there are many many reasons why, obviously enough for a landlord not to want to work with them . this does not mean the landlords are looking to defraud the HMRC , i also do not believe that it is landlords with many properties but those with 1 or 2 because generally these guys are hiding the fact that they are renting , i have herd cases you would not believe , currently in London families with more than one council property are clubbing together living together and renting the ones they vacate ,another who came to see my property to rent was paying her housing benefit to a landlord who was already getting benefit for the property ,this goes to show people will do almost anything to get a roof over their head knowing that they are perhaps breaking the law, and others preying on those and defrauding the government i personally do not wish to be known as a landlord the word stinks and has much stigma attached to it .     

16:11 PM, 9th March 2012
About 7 years ago

i rented property to housing benefit tenants for 15 years and not once in 15years did the local authority obey the law regarding the payment of housing benefit that is why i no longer have benefit tenants
when corrupt local authorities stop treating any law that does not suit them with utter contempt then landlords may take benefit tenants again
as for hmrc is this the same hmrc that purchased personal details of account holders of an international bank stolen by an employee of that bank knowing them to be stolen hardly fit and proper people to lecture anyone on honesty


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Want to avoid empty properties over Christmas?

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More