Monday, 10 August 2009

Is the Government racing to register landlords to boost tax receipts?

John Denham, the Communities Secretary (pictured), wants to fast track the proposed database of private landlords by introducing legislation as early as this autumn. The stated aim is to crackdown on rogue landlords who fail to maintain their properties or fail to manage tenant deposits correctly.

However, according to an article in The Times the real reason could be to allow HMRC (the Taxman) to have access to the database. In particular HMRC are interested in people who rent out rooms in their own homes.

According to the Abbey homeowners taking in lodgers now earn £3.5 billion a year, with each household receiving an average of £6,412. HMRC admitted that it has few details about tax income from private landlords, as it is split between personal self-assessment forms and corporate returns. Nor does it have any idea how many evade payments.

Officials from the Department of Communities and Local Government said that the measures were not intended as a tax crackdown but to strengthen local authorities in tackling bad landlords with a record of exploiting vulnerable tenants. In our experience Local Authorities are so badly stretched that they struggle to deal with their current workload and we seriously doubt that many could cope with an increase if the Government were to introduce such a crackdown.

So we are left to wonder what is the real purpose of Mr Denham's race to bring in legislation that most of the industry is against. In our opinion it is simply a way of raising Tax. Whilst we have no problem with HMRC raising what is due it would be nice for the Government to be honest and tell us why this Minister is in such a desperate rush.

Read The Times article here.