New avenues of HMRC investigations for lanlords
Published on 22 Feb 2013

Chris Leslie from Ta Networks keeps you up-to-date with the landlords tax laws you need to know

Rumour has it HMRC are using information supplied by third parties such as local councils to send probing letters to property landlords.

Typically HMRC are checking on the addresses of the properties owned by the landlord, including the duration the properties were let, the rents involved, the number of rooms in each property and how many tenants at each property.

It is also believed that HMRC is asking these particulars from tenants or third parties without the knowledge of the landlord.

HMRC has strict enquiry rules and these must be observed, however, they also have information and access powers enabling Inspectors to contact third parties such as tenants. A disgruntled tenant with a grudge could cause all sorts of problems.

Armed with this information the Inspectors are cross-referencing to the landlords tax returns. But that is not entirely where the HMRC enquiry stops as suspicious Inspectors will want to know how the property was acquired and where the funds came from in the first place. Buy-to-let applications for loans will be scrutinised, inheritance returns profiled are just some of the avenues that can lead into protracted correspondence and distress with the taxman.

In addition to unpaid income tax HMRC are investigating landlords providing temporary accommodation to students or homeless people, who could find that a sizeable VAT liability is incurred. Some landlords may not realise that VAT is chargeable on temporary accommodation as HMRC Inspectors consider this as income from a hotel or guest house accommodation. There are key hallmarks between trading and let property, but to the uninitiated these differences can be confusing.

Anyone wanting practical advice about HMRC enquiries can contact Chris Leslie at or on 07791 232 051, or by e-mail

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