Cheating landlords set to go on tax black list for five years

Tax cheating landlords are set to go on a ‘black list’ for up to five years as HM Revenue and Customs puts their financial affairs under increased scrutiny.

Guest Blog provided by Steve Sims, author of “Understanding And Paying Less Property Tax For Dummies”.  Steve and his wife also have a boutique accountancy business which specialisis in providing taxation advice and accountancy services for property investors.

HMRC has written to 900 tax cheats – including a number of landlords – to warn them their tax affairs are now managed by a special deliberate defaulters unit. The target landlords are those that HMRC alleges have deliberately evaded tax.
They will stay on the HMRC blacklist until inspectors consider they are complying with tax rules.

David Gauke, Exchequer Secretary to the Treasury, said:

“Managing deliberate defaulters will deter people from evading tax in the future and reassure honest taxpayers that tax evaders will be dealt with. This government has made it clear that we will not tolerate people who refuse to pay their fair share and HMRC will pursue those who bend or break the rules.”

HMRC’s Steve Hickman, said:

“Tax cheat check-ups will involve continued and close scrutiny – it is a real deterrent. If you are thinking about breaking the rules just remember, you could end up with HMRC on your back for five years. We have worked closely with the accountant community to develop this programme and their help has been invaluable in getting the detail right.”

The level and term of monitoring will depend on the seriousness of the offence, but it is not envisaged that anyone will be released from the programme within two years. HMRC will continue to check that returns are filed on time and that any tax that is due is paid on time, but there will also be regular reviews of deliberate defaulters’ tax affairs to check that any errors or failings have been put right.

The scrutiny will include:

• Spot checks on financial records.
• Asking for certain records so that they can be checked.
• Requiring that additional information or documents are sent in with the person’s tax returns.
• Conducting in-depth compliance checks into all or any part of the person’s tax affairs.
• Observing and recording the person’s business activities and cross-checking details in their accounts, like test purchases or cross-checking records with suppliers or customers.

Safeguards are also being put in place to ensure that deliberate defaulters do not escape scrutiny by simply starting up a new business under a different name or identity. In these instances HMRC may continue to monitor the new business.

If you need a property business check or help keeping financial records and preparing tax returns, a link to Steve’s web-site can be found HERE.

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