Cheltenham Landlords Warned About Inland Revenue Investigations

Landlords in Cheltenham and Gloucester are being urged to take note of an Inland Revenue crack down on rental income and back tax. Nick Dardalis, owner of Cheltenham based Steadfast Property Management, highlights recent press reports about the issue. In one such report PKF Accountants have commented that the revenue are sending out "intervention letters" seeking information from individuals about their rental income over the last 3 years.

This action forms part of a new series of initiatives by HM Revenue and Customs (HMRC) targeting back taxes on undeclared rental income.  Although there is apparently no legal requirement to respond to these intervention letters it would be wise to treat them as a "heads up" that these is something the revenue wants to investigate further. And just because you have not make a profit from your rental activities it does not mean that you will be immune from further investigation.

The first batches of letters will be hitting landlords letter-boxes across the country shortly, but bear in mind that this is a pilot scheme so if you don't get one this time round it might mean that Cheltenham and Gloucester landlords are not part of the pilot.  But, but assured that they will be targeted as the scheme is expanded.

The revenue have a number of different methods they use to pinpoint individuals who they think may be letting properties but fail to declare an income from it on their Self Assessment tax returns. HMRC has been quick to use its powers to require banks to provide information regarding specific tax payers during an investigation.

However they are becoming more active in using Government data from Stamp Duty Land Tax returns and other sources to pinpoint individuals who may be letting properties and not declaring the income.

So the message from Nick Dardalis to Cheltenham and Gloucester landlords is clear, make sure that your tax affairs are in order to ensure that you do not have to keep looking over your shoulder!