HM Revenue & Customs has posted 500 letters and could send out 1,500 more in a probe targeting property owners who may have failed to declare their investments.
If ievidence of fraud is uncoivered, HMRC can demand tax, interest and penalties as far back as 20 years.
‘I have information that suggests you have received rent from property but have not included it in your tax return. I need to check with you if my information is correct and, if you have received rents, to work out any tax that may be due,’ the letter says.
The Financial Times reports HMRC plans to evaluate the results of the letters before issuing more over the next few months to taxpayers and their agents. Tax advisers said letting agents and stamp duty land tax returns were likely sources of the HMRC’s information about landlords.
Peter Goodman, of Wilkins Kennedy, said rising rents meant even highly-geared investors might be making a taxable profit from their investments.
The investigation was also expected to identify unpaid capital gains tax on previous investments and ensure future property sales did not slip off the radar.
Further reading:
Buy-to-let couples face new tax bill
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