This article has been provided by George Bull, Senior Tax
Partner at Accountants Baker Tilly:
Armed with
information provided by a local council, HMRC is now targeting domestic
landlords in an attempt to track down those evading tax by failing to declare
rental income.
Letters issued by
the department are looking for information on addresses of properties, periods
let, and the amounts of monthly or weekly rent involved, as well as asking a
string of further questions such as how each property was acquired (e.g.
purchased, inherited, or gifted) and even the number of tenants in each
property.
Clearly it’s good
to see HMRC cracking down on tax cheats, but we do have real concerns over what
appears to be the non-risk-based approach of this campaign. What’s even more
shocking is that telephone staff at HMRC are openly admitting that the probing
letters are being issued without the department having first checked whether
the landlord is in fact fully declaring the rents on their annual tax returns.
Quite aside from
the fact that questions asked of taxpayers who have completed returns under
Self-Assessment must be made under the formal and time-sensitive enquiry
framework, it seems that HMRC staff are unnecessarily wasting the time of
law-abiding taxpayers, as well as their own valuable people resource.
Surely it’s time
HMRC were more careful with their precious resources and invested time in
carefully checking third-party information before sending what might be viewed
as scarily aggressive letters to those who are fully tax compliant?
