Yet another tax crackdown

July 3, 2012

Landlord Information

News has arrived* of yet another major crackdown by the government on tax evasion, with buy to let landlords being cited as one of the major target areas for the special HMRC task forces.

In the past, these crackdowns have been highly controversial for two reasons (and this one is likely to be similarly so):

  • the massive resources dedicated to chasing tiny businesses and the ruthless endeavour applied, appears to be incongruous when viewed against the billions of tax write-offs and tax-evasion blind-eyes that the government virtually accepts it is awarding major enterprises;
  • in the past, such purges have often yielded relatively disappointing returns given the cost of running them and some have dismissed them as being cost-ineffective.

Nevertheless, the government seems determined to hammer various small business sectors that they believe are liable to tax evasion – including that of landlords.

Of course, few landlords would dispute that people deliberately avoiding taxes should be caught and penalised appropriately.  No doubt the vast majority of landlords openly and actively declare their income and pay taxes on it accordingly and it is not entirely clear why landlords appear to figure so prominently and so frequently, when the government decides to have these periodic crackdowns.

However, this news is perhaps a timely reminder of the need for all landlords to maintain proper records, as inspections can happen at any time.

Remember to keep a clear note of your income and your expenses, including details of the premium for your cheap landlords insurance.  As HMRC are far from infallible, it might also be advisable to ensure that you keep copies of everything you send them and if you are in any form of dispute situation with the taxation authorities, make sure that any correspondence you send them is sent recorded delivery.

In some situations, the onus may be on you to prove that you sent something to them and not with them to prove that it never arrived.

Nobody seriously doubts that times are tough and keeping detailed records can be difficult and a chore.

However, given the penalties involved, taking the time and effort to get your bookkeeping into order might be highly advisable.

*Source:

http://www.thisismoney.co.uk/money/news/article-2152701/Taxman-target-buy-let-landlords-taxi-firms-Del-Boy-London-market-traders.html#ixzz1wuZqtAIVmay/21/wales-licences-private-landlords

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