6th
Sep 2017
According to Newham Council there are thousands of landlords in the borough that have apparently 'forgotten' (avoided) to pay millions of tax, and if this is the case then it is more than likely that it is countrywide and the HMRC will be losing hundreds of millions of pounds in revenue each year.
The council believes that in the capital landlords could be owing more than £200 million in unpaid taxes after discovering that in Newham alone there are nearly 13,000 landlords, out of the 27,000 registered in the borough, who have failed to declare their income.
Landlords who earn more than £2,500 in annual rent have to register for tax self assessment and if Newham is typical of all London boroughs, then the HMRC will losing a least £200 million in unpaid tax.
In 2013, Newham was the first council to introduce a compulsory landlord licensing scheme. The government disagreed with the council at the time claiming that the compulsory scheme was an extra and unnecessary cost for good landlords. It was agreed that the scheme would be allowed as the council shared its register with the HMRC to help track down and expose those landlords who are not paying their true share of tax.
Sir Robin Wales, Mayor of Newham, recently corresponded with Chancellor Philip Hammond, and wrote in the letter: "It is our understanding that, to date, up to 13,000 Newham landlords are of interest to HMRC, where there are discrepancies between declared income and our records, with potentially significant financial implication for the exchequer. Our core grant funding has halved since 2010-11, that’s less money for our schools, less money for social care, and less money for housing. I urge you to assess the additional benefits of Newham’s licensing scheme in assisting the exchequer to address tax evasion by landlords."
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