15 Jul 2021
There’s been a sharp fall in money raised from a campaign encouraging landlords to voluntarily disclose tax owed on rental properties according to an accountancy firm.
Like local authorities, HMRC knows more and more about taxpayers and their behaviours was they join together a variety of sources n real-time. Making Tax Digital will become the default for most taxpayers, And then HMRC’s hand will be strengthened massively. HMRC’s use of Artificial Intelligence technology to home in on suspected unpaid tax is only going to increase, with data and information availability improving all the time, and the direction of travel is likely to be an ever greater expectation, even demand, for tax to be paid in real time…
Accurate record keeping is essential, as is planning ahead for the cashflow implications of real time payments.
Landlords should start making plans now as to how they intend to manage the requirements of Making Tax Digital to ensure the switchover is as seamless as possible and to avoid the ire of HMRC.According to Zena Hanks, a partner in the private wealth team at Saffery Champness, HM Revenue and Customs’ Let Property campaign – which was introduced to encourage landlords to admit money owing and encouraging others to inform on landlords – received 4,330 disclosures in 2020/21.
This was a 42 per cent decrease on the previous year, according to a Freedom of Information request made by Saffery Champness; the tax recouped through the campaign nearly halved from more than £34m in 2019/20 to some £17m in 2020/21. When Let Property launched seven years ago it was estimated by HMRC that up 1.5m landlords at that time owed tax, and the Revenue urged voluntary disclosure or the risk of a fine.
Saffery Champness says that up to now the campaign has secured a tax yield of nearly £190m. So be sure that HMRC will becoming after Landlords for more!
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