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Shocking large scale tax evasion by landlords - claim

Rogue landlords have been accused of tax evasion which could cost the Treasury as much as £1.73 billion a year.

The accusation comes from Tax Watch, a think tank which describes itself as “the UK’s only charity dedicated to compliance and sound administration of the law in the field of taxation.”

A report published by the charity this morning says the last time the government completed an estimate of tax evasion in the buy to let sector was back in 2013, when it suggested up to 1.5m landlords may have been failing to declare income - leading to an unpaid ‘tax gap’ of £540m. 


Tax Watch’s analysis of how HMRC compiled the figure in 2013, complemented by more recent data, leads it to calculate that the current figure of tax evasion is £1.73 billion - over three times the amount revealed in 2013.

The think tank charity adds that HMRC’s long-running Let Property Campaign, which involves pressing landlords to ‘come clean’ on unpaid tax, has been largely ineffective.

It says between 2013 and 2019 some 35,099 people made voluntary disclosures to HMRC in response to the Let Property Campaign - only 2.3 per cent of the individuals originally identified. 

To identify tax liability, the charity demands a UK-wide landlord database, and it particularly praises the licensing scheme created by Labour-controlled Newham Council as a way of monitoring landlord and property numbers. 

“The government has been extremely reluctant to roll out licensing schemes used by boroughs like Newham nationwide, deeming it to be an unnecessary regulatory burden on landlords” claims Tax Watch.

It advocates a UK-wide database akin to National Insurance, with each property to let having a unique number which would have to be used by BTL mortgage lenders, licensing authorities and buyers.

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    Yes and let’s also take a look at all these so called charity’s . Nice little tax dodge a lot of them have going there.

    Philip Drake

    There seem to be a large number of “Religious Education Centres”, which are mid-terrace houses. I believe these receive tax perks as well.
    Perhaps there should be a register of these and site visits.

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    • 05 August 2020 07:52 AM

    If every rental property was required to have a number there would be mass homelessness.

    This is because there are millions of fraudulent tenancies.
    Just consider the LL letting properties on residential mortgages without CTL.

    There are reckoned to be 300000 of them.
    Then there are all the properties occupied by illegal immigrants.
    There are reckoned to be 2 million of them.
    Then we have all the DSS tenants occupying in breach of BTL mortgage conditions.

    Then we have those properties with BTL mortgages being used for AirBnB which is fraud.

    The facts are that millions of rental properties are being fraudulently let.

    This is why a National licensing system won't work unless Govt wishes to see mass homelessness


    It may technically be fraud, I would argue that is because of the creation of unnecessary laws and regulations that intrude into peoples private lives.


    We have a reasonably effective national licencing scheme in Wales although its not perfect. Its very much AST focused, so holiday lets, airbnb, lodgers, serviced accommodation, commercial lets, etc are not required to be licenced.

    Any homelessness could be very lucrative for those that choose to take it, a nice contract with the local authority bypassing HHSRS and HMO legislation and many taxes, if you happen to have a hotel or similar. On a smaller scale there's the £10k a year tax exempt income from supported lodgings for the younger homeless.

  • girish mehta

    The HMRC have all the information they have The mortgage co , land registry DWP and councils etc tostary with. They do not need advice from another charity which receive grant from government and have their own agenda.
    They have used data from from hmrc and just produced their report to suit their goal. I am sure if the problem was that widespread then the government and hmrc would have taken action to redress the matter

    Just landloard bashing , busybody charity making noises to justify their existence and jumping on the band wagon

    The government should stop grants to these organisations and use the funds to pay for essential services


    Completely agree I thought the whole point of charities was to raise money for good causes from the public, not being funded by the government which surely undermines their independence


    @Richard Kirwan
    Small correction, they are not funded by the government but by the taxpayers. Margaret Thatcher often reminded her ministers of that fact.

    It would be nice to see charities revert to the idealistic viewpoint of raising money for good causes, but nowadays they are big business. I find all the “Give us money because of Covid 19” adverts a tad annoying. Especially when you have CRUK claiming to have lost £44million because of Covid 19, but MacMillan claiming that nothing will stop them.

  • PossessionFriendUK PossessionFriend

    ... " Reasonably effective " licensing scheme in Wales ? - please explain.

    That surely isn't the same RSW scheme I'm licensed with. !
    Reasonably less cost perhaps, compared to other English greedy Councils. ( as to be fair, Wales is one License per Landlord, Not per property - But why should landlords 'thank' legislators for ripping slightly less off them that other Authorities ! )

    But what do RSW do for licensed Landlords ? -
    Answer, - NOTHING. Communication is next to Non-existent.

    Rent Smart Wales is just another ( slightly less ) money generating machine. To give an example, Wales has legislated that if you don't pay us money for the privilege of Renting your OWN property, we'll stop you getting legal Possession through the courts ( Jarvis v Evans )
    Landlord Licensing schemes are nothing less than legalised extortion.

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    I'm really surprised at Paul Barretts comments about registration causing mass homelessness, the properties let illegally will not disappear, the unscrupulous landlords - and i accept there are tens of thousands of them,will just have to act legally. and obey the legislation. I accept it will take years to catch up but to take the line that illegal letting to illegal immigrants etc. is to be ignored is absurd.
    In london, most councils are pushing forward with licensing of AS tenancies and also licensing HMOs, although with different degrees of success. i feel the fines should be much bigger as a bigger disincentive to offend. Local Councils should be given powers to confiscate properties of persistent offenders, and house homeless people on their registers. Simply to accept matters as they are, is a bit like not enforcing driving without insurance , we manage to license almost 45 million motor vehicles and they move about the place!


    Where is your proof or evidence that " there are tens of thousands of unscrupylous landlords" or are you quoting from a Shelter/GR/SC press release?


    As previously stated, no proof just speculation. Between 5000 and 10000, that is quite a difference. I accept that there are bad landlords but I don’t accept that it is as bad as you and others, make out.

    The vast majority who feature on television programmes do, however, seem to be ethnic landlords who prey on the vulnerable or those new to this country who do not understand the law.

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    • 06 August 2020 19:13 PM


    You are being incredibly naive if you believe there aren't millions of fraudulent tenancies out there.

    Take for just one huge example the issues caused by CV19.

    Many BTL mortgages still have what I agree are penal conditions that prevent a LL from taking on DSS tenants.
    This currently ISN'T discoverable.
    A LL licensing scheme would make it so!!
    Lenders would be required to confirm in writing that the LL has the right to let to DSS tenants.
    LL know their mortgage conditions prohibit such tenant types.

    Lenders could easily exercise their rights to call in the BTL mortgage or give the LL a time by which the tenants AREN'T DSS claimants.

    Personally I believe Govt should ban all BTL lenders from having conditions that prevent any sort of tenant types.
    But we are where we are.

    Then we have all the fraudster LL who AREN'T really LL but are Accidental ones who are letting on residential mortgages WITHOUT CTL.
    There are reckoned to be at least 300000 properties like this.

    A registration scheme would expose all these fraudulent tenancies.
    It would collapse the UK property market and probably cause a run on the banks.

    This fraud sleeping dog is best left alone and that means no LL registration scheme.


    Lyndon, of course there is no accurate information on unscrupulous and by derivation unlicensed landlords. there is no information of those people who exceed the speed limit, only those that get caught.
    i work as a residential surveyor a managing agent i also work for professional landlords and and am a landlord myself. For my sins i have a great number of dealings with HMO licensing for several London Boroughs and to pick only 3, each have stated that they have knowledge of between 5,000 and 10,000 unlicensed properties (per borough) that they are trying to chase down now. There are 32 london boroughs which gives 160,000 conservatively just in Greater London.

  • PossessionFriendUK PossessionFriend

    Will be a huge disappointment for the Landlord bashers ( and there's a lot of em ! )

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    • 07 August 2020 14:42 PM


    There you go you have direct not just anecdotal information of the numbers of fraudulent tenancies.

    Now we all know these issues tend to occur in diverse areas and targeting the rogues would result in outcry of Govt racially profiling certain LL.

    Having a cheap licence to operate would be as with a dtiving licence something that if you are caught not having a valud one could land you in jail.

    I like the sanction idea of RRO for any LL who operates without a licence for himself or property.

    But for that to occur the licence fee should be no more than £100 for 5 years.
    Few good LL would not register for a licence.
    Any LL letting without a licence would be subject to RRO.
    I'd imagine even the dopiest Councils would be able to detect these lettings and apply RRO.

    Wr all know where the rogues operate.
    Funnily enough it is where the CV19 is resurging.
    In fact I would go as far as to say you won't find many rogue LL in white midfle clasz areas.
    That should make it then far easier to target areas where it is obvious rogue LL and tenants abound especially illegal immigrants.

    It is a proven fact that most of the illegal immigrants come from Pakistan etc.
    So nothing wrong in targeting the areas they tend to congregate in.

    My contentions are still correct that there are millions of fraudulent tenancies out there which LL licensing would ultimately detect.

    It is not in Govt interest to have every tenancy being completely legal..


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