Buy-to-let landlords who have admitted to evading tax on their rental income underpaid an average of £4,480 in tax last year, up 72% from an average of £2,610 underpaid the year before.
UHY Hacker Young, the national accountancy group, said it’s likely that landlords who have evaded larger amounts of tax are now beginning to come forward, as HMRC applies more pressure on the sector.
Clive Gawthorpe, partner at UHY Hacker Young, said: “When landlords who are hiding income get a warning letter from HMRC, they realise that HMRC is closing in on them and they can no longer hide.”
“HMRC is giving landlords a chance to confess and in return, it will lessen the penalties imposed. This will be the most favourable outcome for landlords and any with undisclosed income ought to take that opportunity before it’s too late.”
“If a landlord decides to come forward under the campaign, it’s better to do it with professional advice, particularly if their tax affairs are complex. This will be key in helping avoid any mistakes and the possibility of further investigations by HMRC.”
HMRC has been running a “Let Property Campaign” since 2013 which allows buy-to-let landlords and the owners of holiday homes to voluntarily disclose unpaid tax.
At the time of the launch, HMRC estimated that 1.5million landlords were underpaying their tax or not paying it at all.
This post has originally been featured in Property Wire.