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The taxman is about to knock on the doors of buy-to-let landlords who it suspects of not paying enough tax on their investments. Under a new initiative by HMRC, officials will match stamp duty records and details provided by letting agents to landlords with untaxed rental income and gains. Advisers warn that from April, the department’s officers will have the power to turn up and inspect landlords’ tax records at their homes, if that is where records are kept. The same “We encourage landlords to keep business and private records separately to avoid an inspector seeing personal records that they have no right to,” said Grant Thornton. The occupier will normally be notified at least seven days before an inspection, the firm said, though in some circumstances no notice need be given for inspection. Phil Espin, its tax director, added: “It's likely that only the most serious cases will warrant a knock on the door from the taxman, but it signals HMRC’s intent to pursue persistent tax evaders.” “If landlords do realise they have made a mistake they should take tax advice immediately and contact HMRC, before the taxman approaches them.” Espin advised it was crucial to notify officials to any new taxable income, including rental income, as he said HMRC looked upon voluntary disclosures “favourably.” Landlords are reminded that only the interest payable on a mortgage loan can be offset against tax, not the full cost of a repayment mortgage against their profits. Sep 26, 2008 Email this article Printer friendly page Previous Page
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