A tax specialist has expressed concern that HMRC, armed with information provided by local authorities, could now be hounding private landlords in an attempt to track down tax dodgers.
Mike Down, of accountancy firm Baker Tilly, said he had seen a copy of a ‘stencilled’ letter sent to one landlord client. The landlord in question had been perfectly compliant about declaring his rental income. The information utilised by HMRC had been supplied by a local council in the west country.
Down said the letter was asking for information on addresses of properties, periods let, and the amounts of monthly or weekly rent involved, as well as asking a string of further questions such as how each property was acquired (e.g. purchased, inherited or gifted), and the number of tenants in each property.
He said: “Clearly it’s good to see HMRC cracking down on tax cheats, but we do have real concerns over what appears to be the non-risk-based approach of this campaign.
“What’s even more shocking is that telephone staff at HMRC are openly admitting that the probing letters are being issued without the department having first checked whether the landlord is in fact fully declaring the rents on their annual tax returns.
“Quite aside from the fact that questions asked of taxpayers who have completed returns under Self-Assessment must be made under the formal and time-sensitive enquiry framework, it seems that HMRC staff are unnecessarily wasting the time of law-abiding taxpayers, as well as their own valuable people resource.
“Surely it’s time HMRC were more careful with their precious resources and invested time in carefully checking third-party information before sending what might be viewed as scarily aggressive letters to those who are fully tax compliant?”