While the vast majority of buy to let landlords in the UK are honest and law abiding, there are nevertheless a small number who insist on cutting costs to the degree that they are breaking the law. Tax evasion among some buy to let landlords has recently become of particular interest to HMRC, which has put together a task force to deal with the issue.
While HMRC warned on November 7th that the crackdown has begun on tax evading buy to let landlords, it pointed out that most did not choose to evade their tax obligations.
Two areas that will be placed under the microscope by the special HMRC taskforce are North Wales and north-west England.
Mike Wells, Director of Risk and Intelligence at the agency said: "HMRC is clear - if you deliberately seek to evade tax we can and will track you down and you'll face not only a heavy fine, but possibly a criminal prosecution as well,"
One safeguard already in place is the Mortgage Verification Scheme, set up by the Building Societies Association in order to verify declared income figures of would-be borrowers, by comparing details on home loan applications to data held by the HMRC.
Clearly, adhering to the law is the only option, and the small number of buy to let property owners who are in the wrong do not of course reflect most landlords’ behavior. With many other ways of cutting costs – including seeking out good deals on buy to let insurance or other applicable policies – it only takes a little research and bills can be lowered in the medium to long term.
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