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Warning of buy-to-let clampdown

24 September 2008
Categories: News , Buy-to-let , Admin , Income Tax
Tax evasion alert for landlords

Buy-to-let investors must keep accurate records or face inspection from the taxman's newly empowered inspectors, Grant Thornton has warned.

The company's alert follows HMRC's ramping up of its efforts to recoup lost revenue as a result of landlords either making accidental errors on their tax returns or deliberately evading the payment of levies on rental income.

As part of a new initiative to identify untaxed rental income and gains, information routinely gathered from local government authorities, letting agents and the Revenue's stamp taxes office will be 'data matched' to identify individuals who have not made the appropriate returns.

With effect from 1 April 2009, if HMRC suspect a landlord has untaxed rental income and gains, officers will have the power to inspect business records at premises. For an individual landlord this could include his or her private residence.

Phil Espin of Grant Thornton's national tax investigations team said: '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'.

He added: 'Landlords need to be aware that HMRC has new inspection powers for visiting business premises to look at records and these powers are expected to take effect from next April. We encourage landlords to keep business and private records separately to avoid an Inspector seeing personal records that they have no right to.'

Grant Thornton has advised that landlords, like businesses, keep records of property income and expenses for at least six years after the tax year to which they apply.

Categories: News , Buy-to-let , Admin , Income Tax
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