The tax man has recovered millions of pounds of lost tax from landlords – but expected returns from the seven-year probe are falling far short of expectations.
The Let Property Campaign started in 2013 and was set up to tackle assumed tax avoidance by landlords.
HMRC stated around 1.5 million landlords were suspected of lying on their tax returns to underpay their tax or not pay any at all.
Seven years later, the campaign which was due to end after 18 months is still running.
In 2018, HMRC uncovered 8,704 landlords paying the wrong tax and recovered £32.8 million.
A year later, 11,129 landlords were found avoiding £44.7 million tax.
In comparison, the number of landlords in the UK in those years was between 2.6 million and 2.88 million.
“The Let Property Campaign is an opportunity for landlords who owe tax through letting out residential property, in the UK or abroad, to get up to date with their tax affairs in a simple way and take advantage of the best possible terms,” says HMRC’s campaign web site
“If you’re a landlord and you have undisclosed income, you must tell HMRC about any unpaid tax now. You’ll then have 90 days to work out and pay what you owe.”
Under the disclosure scheme, HMRC can go back 20 years to examine tax and accounting records in serious tax evasion cases.
Investigations go back six years for landlords volunteering that they have underpaid tax.
Statistics gathered from a freedom of information request published by an accountancy firm in July last year reveal HMRC has dealt with 53,570 let property campaign disclosures and recovered £152 million in tax plus £18.7 million interest and £23.7 million from penalties.
The average amount HMRC gained from each disclosure was £3,662.