Buy-to-let specialists have backed HM Revenue & Customs’ move to stamp out tax evasion on rented properties.
HMRC has launched a specialist taskforce to target evasion in the sector. The taskforce covers East Anglia, London, Leeds, York, Leicester, Nottingham, Lincoln, Durham and Sunderland and is expected to recover more than £17m.
The team will visit suspected tax evaders to examine their records and carry out investigations.
The property rental team is one of a number of HMRC specialist taskforces investigating specific high-risk sectors and locations in the UK. HMRC launched 12 taskforces in 2011/12 and 30 more will follow in 2012/13.
Buy-to-let brokers have praised HMRC for clamping down on tax evasion and say it will not affect landlords’ demand for property.
Mortgages for Business managing director David Whittaker says: “I would say no more than 5 per cent of people with buy-to-let properties look to evade tax but that is still 5 per cent too many. It is morally indefensible and means the rest of us end up paying more tax as a consequence.
“There is plenty of profit to be made in the buy-to-let sector, so I have no fears it will have a negative impact.”
Mortgage Concepts Associates director Mike Richards says: “A lot of people do not pay tax on their rental properties and it is good to see HMRC cracking down on this.
“The move will not stop people buying buy-to-let properties. All it will do is ensure people are paying the tax they should be paying.”