22nd
May 2023
The Renters Reform Bill unveiling in parliament this week ‘exposes’ the government’s plans of launching a new landlord database, a veritable gold mine of information for the HMRC with which to pursue landlords for unpaid tax, according to an accountancy and business advisory firm.
Although the Bill does not fully clarify the extent of the information HMRC will be allowed to access for registration ‘purposes’, the tax experts say it is reasonable to assume that the tax authority will make use of the publicly accessible landlord data for compliance activities.
The firm says HMRC is keen to ensure landlords declare their rental profits and gains on sale so they pay the tax they owe. It encourages those who have made mistakes to voluntarily correct their position by using the Let Property Campaign, part of HMRC’s Digital Disclosure Service, or other disclosure processes.
Further property information will also become available after the Land Registry implements the new information requirements in the Levelling-up and Regeneration Bill which is also aimed at extending transparency of property ownership and transactions.
HMRC will combine any new data from the landlord database with what it can already access such as the Land Registry’s records, the Register of Overseas
Entities owning UK property and the data within HMRC’s own Connect database, which reportedly holds over 55 billion pieces of data
The data will almost certainly help HMRC identify cases for investigation, with a view to charging tax, late payment interest and tax-geared penalties.
The Head of Tax Dispute Resolution, says: “The introduction of a new private rented sector database will leave few places to hide for landlords who don’t comply.
“Any landlords who don’t currently pay the right amount of tax would be well advised to bring their UK tax affairs up to date before the register is introduced.
“Making an unprompted disclosure should lead to lower tax-geared penalties for errors, compared to rectifying mistakes after HMRC gets in contact. It will also help to mitigate late payment interest – which is currently at a 14-year high of 6.75% per annum and due to rise to 7% from 31 May.”
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