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Surge in landlords declaring unpaid tax following HMRC crackdown

The number of landlords admitting to not paying tax has soared in the past year, according to new data.

During 2018/2019, 16,110 landlords declared unpaid tax, up from 6,600 in 2017/18. 

Additional taxes collected by HMRC from landlords who admitted to unpaid tax on their rental income have increased from £21 million to £42 million during this period.


It is believed the 145% jump rise in landlords declaring unpaid tax is due to HMRC's promotion of its Let Property Campaign via letters sent to those suspected of avoiding or underpaying tax.

The campaign, in operation since 2013, offers landlords lower penalties if they make a full disclosure rather than waiting for HMRC officials to discover they have not paid enough tax.

"[The] focus on buy-to-let landlords is clearly intensifying, as the buy-to-let market is becoming a key source of unpaid tax for HMRC," says Mark Giddens, partner at accounting group UHY Hacker Young.

"Under-declaring rental income and failing to pay Capital Gains Tax on the sale of buy-to-let properties has seen some landlords slapped with heavy penalties and even sentenced to prison," he says.

"Landlords are wise to contact HMRC and declare unpaid taxes, rather than facing big fines and possible criminal prosecution." 

"HMRC is now ignoring the heavy administrative work involved in establishing and prosecuting tax fraud and showing their intent to expose any buy-to-let landlords that ignore their tax duties," adds Giddens.

Let Property was originally intended to run for just 18 months but has been extended indefinitely.

At the time of its launch, HMRC estimated that up to 1.5 million landlords across the UK were underpaying tax worth as much as £500 million a year.

However, earlier this year, Freedom of Information requests made by accountancy firm Saffery Champness revealed that in the first five years of the scheme's operation, just 35,099 people made voluntary disclosures to HMRC, only 2.3% of the individuals originally identified.

Meanwhile, of the estimated £500 million in underpaid taxes only £85 million was recovered between 2013 and 2018.

  • Barry X


    Just another sledge hammer to crack a nut.... I bet if you were able to do full cost-accounting HMRC has probably spent almost as much, if not more, setting this up and running it than it's recouped in otherwise undeclared tax from landlords...... its just for show, I'd say.... tax payers' money spent on making the HMRC people look busy doing "something" while in reality its very poor value for us as tax payers funding all this inefficient low-yield nonsense.

    ....Meanwhile at the other end of the scale, due mainly to incompetence and an apparent inability by HMRC to understand trends in technology and business, it seems they're happy to do a few "deals" with some of the biggest companies in the world (like Amazon and Google, for example) and in the process fail to even notice, let alone collect, hundreds of millions in potential tax!

    They should start with potential big wins (even though those big companies can afford to employ the best tax advisers in the world, not just accountants but also legal experts specialising in tax laws) but HMRC is representing the government, for goodness sake, so should not be afraid of these firms - or feel threatened or inadequate when dealing with them - but if they were any good (which is the problem) should feel more than equal to them and fully in charge..... THEN they might stop spending all their time and efforts on attacking people like us, the minnows, and go after some proper big fish for a change!

  • S l
    • S l
    • 08 July 2019 12:30 PM

    The HMRC finally figure out the huge revenue to gain from penalties from unsuspecting small time individual landlord who does not know they can be penalise for not making tax declaration due to lack of profit or losses made from btl compare to doing all the heavy duty administrative work of chasing after profits earn from btl and prs where a lot of people are not making much profit and having losses with not much tax to gain from them.

  • icon

    How about taxing tenants who steal UC or HB money as it then becomes income?

    S l
    • S l
    • 08 July 2019 12:55 PM

    that will be the day

    Barry X

    ...if only they would!

    ...and I've noticed (having followed it over the years) that quite often surprisingly wealthy criminals, whose money is almost certainly all "proceeds of crime" are given pitifully short sentances (because our prisons are overcrowded and we apparently can't afford to house many more criminals, let alone keep them locked up for long more or less no matter WHAT they've done), and then their already short sentences are quietly halved so, for example, if sentanced for "nine months" they are typically really released after only 2 - 3 months, or sometimes only a single month "on licence" and with a "tag" that makes little difference to them really (particularly as the technology behind it is so feeble)..... and guess what? If they were convicted of massive housing benefit fraud or for that matter tax evasion, rarely if ever have they been required to repay ANY of it! So we the tax payer foot the bill for an incredibly costly and inefficient investigation (actually lots and lots of them as most fail and are eventually abandoned, but we still pay for them all), then an incredibly inefficient and excessive trail (the Justice System and Crown Prosecution System are incredibly inefficient and overly costly "public services" - I often consider them "Dis-services"!)....

    ....so once again when the "full life-cycle costs" are taken into account, including an allowance for all the failed investigations and failed prosecutions and costs of the prison and parole services too, we (the tax payers) are made to pay VASTLY more than is ever recouped...... its all a bit bizarre to say the least. Instead of targeting small-fry landlords and agents and trying to tax us to death (as we're easy prey), they could probably SAVE tens if not hundreds of times as much by NOT spending large amounts of money going after us for relatively small amounts, but by simplifying and actually improving their systems - especially the behind-the-scenes bits we rarely get to see or notice but that are probably the largest, most expensive and totally inefficient and inept!

    on the one hand I wish I was in charge of it all and able to start sorting it out.... on the other hand I'm VERY glad I'm not!

    Rant over.

  • icon

    Message: Nice rant! Maybe instead of building 'desperately needed' houses everywhere we should roll out a programme of building prisons instead. Not enough space to house criminals? How ridiculous. If the nation is full of scum who steal, con, attack, abuse and repeat offend we should be taking away their rights to live in the community. Sentencing in relation to severity of crime and the effort it has taken to, say for example, track a gang coming into the country to target cash machines (as seen on TV recently) is pathetic. Period.


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