Buy-to-let landlords in East Anglia, London, Yorkshire and the North East are being targeted as HMRC has announced ‘tax forces’ in attempts to clamp down on tax evaders. Geographic areas will be targeted as each tax force clamps down in order to recover an estimated £17 million.
Exchequer Secretary, David Gauke, said: “We have made it clear that we will not tolerate tax evasion. Everyone needs to pay the taxes they own in full. We are determined to crack down on the minority who choose to break the rules.”
However landlords don’t have to pay tax, or if they do it can be kept to a minimum. Tax avoidance isn’t illegal; it’s what every successful business man does. As long as landlords keep themselves fully informed about what tax allowances they are entitled to and keep up all records up to date, they won’t have to pay unnecessary tax.
It has been reported that any landlords who think they may be targeted should make sure their self-assessment tax return is in order as soon as possible, or make a voluntary disclosure to HMRC, as they will be treated more leniently if they show willing.
It is recommended that landlords do not approach HMRC directly without understanding their entitlements. HMRC are increasingly tough negotiators, therefore without detailed knowledge of the tax system you could end up with a larger tax bill and penalty than necessary.
Self-assessment can be time consuming and complicated therefore seeing a tax consultant/accountant may be a better option. A good tax adviser will not only complete the self-assessment on your behalf, but will also ensure the maximum allowances are claimed back
To avoid paying unnecessary tax, it is always advisable to speak to a tax advice professional.
By guest writer, Amanda Wilson, u-tax.co.uk