New warnings have been issued by major accountants UHY Hacker Young that Landlords are likely to be targeted by HMRC (The Tax Man).
The Government has set HMRC a target of raising £16.1 Billion from Tax Investigations, an increase of £4.6 Billion on the last tax year. Since early 2008 we have been warning Landlords that HMRC is targeting you in an effort to raise more Tax. This warning has been echoed by the media and Landlord Organisations.
Whilst it is quite right that HMRC should collect all the Tax due and indeed vigorously pursue Landlords who fail to make correct Tax Returns, Landlords all over the country have told us that they feel victimised. Many have told us that is was cheaper to pay the amount HMRC have demanded than to fight the claim.
HMRC have said that they have no agenda to specifically target Landlords and yet accountants and the media believe that HMRC are targeting Landlords. They point to evidence that HMRC are trawling through the Land Registry to gather information. There have been stories of HMRC officials going as far as checking small ads in shop windows for rented property in order to contact Landlords who might be avoiding Tax.
The advice from accountants we have spoken to is simple - ensure that you keep all records and documents relating to your property and ensure that you submit Tax Returns accurately and on time. Accountants say that far too many Landlords do not keep accurate records and that when the Tax Man comes knocking Landlords do not have the evidence to defend themselves.