According to recent reports, HM Revenue and Customs (HMRC) are intending to target up to a million landlords, especially ‘buy to let’ landlords, whom they suspect have not fully declared their income and also taxpayers who transfer money from abroad to take advantage of UK investor protection.
Under new rules that come into force in April 2009, HMRC officers will have the right to inspect a landlord’s business records in his or her home.
The move comes shortly after it was reported that HMRC are instructing senior tax lawyers to help them deal with the backlog of cases of tax evasion selected for possible prosecution following HMRC having gained access to offshore account information in the last few months.
With over a million buy to let mortgages in existence, the likelihood of a knock on the door by the taxman is diminished where the loan is small. However, where the loan is large, HMRC’s assumption is likely to be that the income is considerable and the chance of an enquiry is therefore relatively high. If a tax return has not been submitted and there is a buy to let mortgage, there is also a considerable risk of an enquiry.
Under new rules that come into force in April 2009, HMRC officers will have the right to inspect a landlord’s business records in his or her home.
The move comes shortly after it was reported that HMRC are instructing senior tax lawyers to help them deal with the backlog of cases of tax evasion selected for possible prosecution following HMRC having gained access to offshore account information in the last few months.
With over a million buy to let mortgages in existence, the likelihood of a knock on the door by the taxman is diminished where the loan is small. However, where the loan is large, HMRC’s assumption is likely to be that the income is considerable and the chance of an enquiry is therefore relatively high. If a tax return has not been submitted and there is a buy to let mortgage, there is also a considerable risk of an enquiry.
In addition, it has been reported that HMRC are seeking to identify taxpayers who bring large sums of money into the UK from abroad, to seek investor protection which is not available in some countries. HMRC consider that such deposits may be an indication of the repatriation of 'ill-gotten gains'.
Readers who find themselves being targeted for an HMRC enquiry are advised to seek legal advice as soon as possible.
