A national accountancy firm claims the HM Revenue & Customs has found huge numbers of landlords avoiding paying tax - as many as 14 landlords per 100,000 population in some locations.

Image credit: Unsplash

The accountancy firm’s team scrutinised the HMRC Let Campaign’s figures and states London’s commuter towns form the top five highest areas for landlords ‘forgetting’ to pay their tax.

Ilford came put on top with the highest number of landlords per capita in England ‘owning up to’ not paying the full amount  of tax on their rental income in the last twelve months – 14.3 per cent per 100,000 people.

The ‘runner up’ was Slough with 12.6 per cent of landlords (per 100,000 people) admitting to underpayment of tax, in third place was Dartford with 12.1, followed by Luton – 11.6 per cent and Enfield – 11.3 per cent.

This all came to light following the HMRC’s mailshot campaign sent to landlords believed to have avoided paying tax on their incomes and telling them there would be severe consequences for tax avoidance.

The HMRC’s campaign was an outright success in persuading millions of PRS landlords admitting to underpayments to avoid considerable fines from a thorough tax investigation.

The HMRC claims that the campaign yielded additional tax to the tune of £17.7m over the last twelve months.

The chartered accountants believes that HMRC’s Connect AI system identified BTL landlords underpaying or not paying any tax by cross referencing many sources of information such as the Land Registry, council tax bills, as well as property sites – Rightmove and Zoopla.

A partner of the chartered accountants, says: “HMRC sees rich pickings in the buy to let market in terms of unpaid tax. The amounts collected from landlords who have voluntarily come forward suggest they may be right in their assessment.

“Landlords leave themselves vulnerable to prosecution and even a prison sentence if they fail to declare the correct amount of rental income or pay Capital Gains Tax on the sale of buy to let properties.