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Council working with HMRC to expose tax-evading private landlords

A council claims that up to 13,000 private landlords are “of interest” to HM Revenue and Customs, where there are alleged discrepancies between council records and income declared to the tax authorities.

Newham council says the 13,000 represent almost half of all the landlords in the borough and the figure has been calculated through analysis of the authority’s private rental sector licensing scheme, which is widely regarded as one of the most comprehensive in the country.

Newham has been working with HMRC and through the data collected by its licensing regime has been able to assist HMRC in assessing tax compliance by landlords.

Research previously conducted by Newham, which was independently evaluated by the Institute for Public Policy Research, suggested that the amount of undeclared tax by landlords in London back in 2014 could be as much as £183.1m. 

Newham Mayor, Sir Robin Wales, says: “In addition to uncovering large scale exploitation of vulnerable tenants, our licensing scheme has also unearthed that many unscrupulous landlords may be benefiting from undeclared tax.

“At a time when local authorities are experiencing savage cuts and Newham alone has had half its grant funding cut; possible tax evasion on this scale takes money from vital public services. This is money out of the pockets of our poorest residents who rely on our services the most”

“While the Chancellor is scrambling around ahead of his Autumn Budget and the Prime Minister is claiming there is ‘no Magic Money Tree’, Newham has the solution in private rented licensing.“

Newham was the first authority in the country to introduce borough-wide licensing in 2013, which requires all landlords to licence all property offered for private rent.

Over the last five years the council has instigated 1,135 prosecutions for housing crimes, banned 28 of the worst landlords from operating in the borough, recovered over £2.6m a year in additional council tax and served 2,170 notices to improve housing conditions and management.

Newham has 26,254 landlords registered as holding a property licences or licenses and wants to continue its scheme - although requires government agreement to do so. 

A decision is expected from the Department of Communities and Local Government next month.

  • Mark Hempshell

    All very laudable, but has anybody told Newham Council that any tax arrears collected won't actually end up in their budget?

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    This story is phoney. Newham introduced the first compulsory Landlord licensing scheme in the country.

    Their Licensing scheme is up for renewal, so they they are spreading propaganda to the press, to force the Government to allow them to renew the Licensing scheme.

    They can't say there are rogue landlords in the Borough, because they managed to license 40,000 properties (27,000 landlords).

    They are also double and trip charging for the same property. If the property is transferred or sold, then a brand new license is needed. Their new fees are anywhere from £500 to £2000.

    Did HMRC share data with Newham council?. If so it is illegal.

    Some landlords, may have tenants who did n't pay the rent. So income tax is not due.

     
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    How perfect, Newham have found a propaganda rich fix all for everyone just ahead of government approval……I presume the analysis didn’t come with full property management and rent guarantee on the council & HMRC s part and all the assessments were based upon declared rental incomes on applications and not actual rental incomes. I wonder what the total rent arrears and rent shortfalls for Newhams private sector adds up to……not withstanding I’m sure there are of course tax dodgers in there somewhere but no way is this figure almost half.

  • James Hurst

    I would have thought that the requirement to lodge a deposit and in doing so notify the deposit agency of the length of tenancy and rent payable, there would be a far easier way to work out how much tax was due from landlords and exactly who those landlords are.

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    i work in Newham and rent a number of properties in council owned and managed buildings they are the worst landlord i come in contact with our owners are put through the mill to get the simplest of things managed, " to help the most vunerable" dont make me laugh...........!!

    As mentioned above funny how this surfaces when they are petitioning to renew the license in december, if you are a landlord looking for a license now you will be charged the same a someone who applied 5 years ago for 4 months do the council need a license ? dont think they would pass the test as fit and proper.

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