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Brit taxman to target expat landlords in new crackdown
| Published: | 26 Dec at 6 PM |
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Tax avoidance by expat landlords is next in line for an HMRC crackdown.
As the number of expat buy-to-let property purchases continues to soar, Her Majesty’s Revenue and Customs office is taking aim at expat landlords in a new crackdown on tax avoidance. The new policy is aimed at shrinking Britain’s black economy as well as increasing tax revenues against the chance of a hard Brexit’s effect on traditional revenue streams.
The crackdown will ensure expat landlords are registered with HMRC and are paying the correct amounts of tax on their buy-to-let profits.Once the taxman’s plan is in place, expat landlords will not be granted property licenses unless they are able to prove they are properly registered with HMRC and are paying the right amount of tax. According to the authority, the measures will stop widespread tax avoidance by expats and also reduce the present £3.5 million tax gap.
In a new consultation paper entitled ‘Tackling the hidden economy: public sector licensing’, HMRC suggests those targeted by the crackdown will be private landlords applying for licenses for properties in multiple occupation. In addition, landlords with ‘selected license’ homes will also come under the new rules. At present, some 510,000 properties fall under the classification, with some 64,000 as yet unlicensed. However, the UK’s Department of Communities and Local Government is also planning to force thousands more properties to register for licenses, adding a further 160,000 rentals to the HMRC’s listings.
In an interview, a spokesperson for HMRC designated the new strategy, saying preventing people from entering the hidden economy in the first place is a key aim of the new rules. Promoting tax registration and landlords’ obligations to register in order to declare their incomes is a first step in the process. As part of the scheme, landlords already registered can expect to have their approvals checked for tax registration and. should the proposals be fully adopted by HMRC, new expat landlords will be forced to register with the taxman before they can legally rent out their buy-to-let property.
As the number of expat buy-to-let property purchases continues to soar, Her Majesty’s Revenue and Customs office is taking aim at expat landlords in a new crackdown on tax avoidance. The new policy is aimed at shrinking Britain’s black economy as well as increasing tax revenues against the chance of a hard Brexit’s effect on traditional revenue streams.
The crackdown will ensure expat landlords are registered with HMRC and are paying the correct amounts of tax on their buy-to-let profits.Once the taxman’s plan is in place, expat landlords will not be granted property licenses unless they are able to prove they are properly registered with HMRC and are paying the right amount of tax. According to the authority, the measures will stop widespread tax avoidance by expats and also reduce the present £3.5 million tax gap.
In a new consultation paper entitled ‘Tackling the hidden economy: public sector licensing’, HMRC suggests those targeted by the crackdown will be private landlords applying for licenses for properties in multiple occupation. In addition, landlords with ‘selected license’ homes will also come under the new rules. At present, some 510,000 properties fall under the classification, with some 64,000 as yet unlicensed. However, the UK’s Department of Communities and Local Government is also planning to force thousands more properties to register for licenses, adding a further 160,000 rentals to the HMRC’s listings.
In an interview, a spokesperson for HMRC designated the new strategy, saying preventing people from entering the hidden economy in the first place is a key aim of the new rules. Promoting tax registration and landlords’ obligations to register in order to declare their incomes is a first step in the process. As part of the scheme, landlords already registered can expect to have their approvals checked for tax registration and. should the proposals be fully adopted by HMRC, new expat landlords will be forced to register with the taxman before they can legally rent out their buy-to-let property.
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