Landlord licensing schemes are not popular with landlords, as many believe they create extra red-tape and increase landlord costs. As a result of complaints, some areas have had their requests to impose a landlord licensing scheme revoked by the Department for Communities and Local Government. However, whilst a landlord licensing scheme may not be terribly popular, it has highlighted that many landlords are not declaring their rental income to HMRC.
*****Whoops! Looks like this is an old post that isn’t relevant any more :/ *****
*****Visit the blog home page for the most up to date news. *****
Newham council in London has 27,000 registered landlords on its books, but after sharing data with HMRC, it seems that nearly half of Newham landlords have not registered for self-assessment.
Registering for Self-Assessment
Landlords (and everyone else) are required to register for self-assessment if they earn more than £2,500 per year. Newham estimates that the public purse is owed around £200 million in unpaid tax from just one borough, so if this pattern is repeated across all areas of the UK, HMRC is missing out on a huge amount of tax revenue.
The mayor of Newham, Sir Robin Wales, has written to Philip Hammond to highlight the issue. He described the problem as having “potentially significant financial implication for the exchequer.”
Tax Evaders on HMRCs Radar
He urged the chancellor to rethink his plans to scrap landlord licensing schemes on the basis that landlord licensing helped the exchequer identity landlords who might be evading tax.
HMRC has the power to claw back tax 20 years in arrears, as well as fine tax evaders up to 100% of unpaid tax. Some people can look forward to a letter from HMRC very soon.
Filling in your tax return doesn’t have to be difficult. Landlord Vision has a powerful accounting engine that does all the hard work for you: