- HMRC announces crackdown on property tax dodgers - 09.09.2014
A taskforce tackling people trying to dodge property tax in the north west and north Wales has been launched this week by HM Revenue and Customs.
The taskforce will target those who have sold one or more properties and haven't paid Capital Gains Tax or disclosed rental income.
Using intelligence from the Valuation Office Agency to track down the tax cheats, the taskforce is expected to recover £5 million.
HMRC has delivered more than £190 million as a result of taskforces launched since 2011-12. Over £12 million has been recovered as a result of property rentals taskforces operating in London, south east England and Yorkshire, with over 80 cases currently under criminal investigation. Taskforces expect to bring in over £100 million during 2014-15.
HMRC's Jennie Granger, Director General of Enforcement and Compliance, said:
“HMRC taskforces are deployed in sectors and areas where we've detected a high risk of tax evasion. For example, in a previous property taskforce in London in 2013 we uncovered a barrister who had evaded £471,512 in unreturned capital gains.
The people being targeted by our taskforces have no intention of playing by the rules and could end up facing a heavy fine or even a criminal conviction.
A Hertfordshire property consultant who failed to declare or pay Capital Gains Tax and rental income on a number of properties was uncovered by an HMRC taskforce in 2013 and, as well as paying the tax and interest due, now has a criminal record.
If you haven't declared all your income, we will find you and investigate.”
- Failing to protect a deposit causes 38% of landlords eviction problems - 07.09.2014
According to Landlord Action, as many as 38% of landlords calling for advice on evicting a tenant have failed to place their tenants' deposits in a government-recognised scheme within the prescribed 30 days of receiving it.
Reviewing enquiries from the start of this year, Landlord Action says there is still a major problem with amateur landlords (and some agents) having very little knowledge of this important piece of legislation, which is seeing an increasing number of landlords facing penalties of up to three times the value of the deposit, which is then awarded to the tenant. The landlords also face penalties if their agent failed to comply with the legislation, which adds tension to the relationship between landlords and their agents.
Paul Shamplina, Founder of Landlord Action, believes that there are too many landlords that still do not know enough about being a landlord and their responsibilities.
"Many are failing to comply with deposit protection rules and this is having a knock-on effect when landlords wish to evict through Section 21. The simple fact is, ignorance will not solve the problem.”
The only way a landlord can legally evict a tenant who will not move out voluntarily (and who is not in arrears or in breach of their tenancy agreement) is via a court order for possession, but in order to obtain this, a landlord must first return the deposit. Furthermore, Landlord Action says they are receiving more and more phone calls from desperate landlords who are being sued by their tenants for compensation for not protecting the deposit.
Mr Shamplina adds:“It seems to me, that tenants are becoming savvier than landlords when it comes to buy to let legislation. Landlords, this is your business, you must be fully versed in your responsibilities”.
According to Landlord Action’s Legal Team, many solicitors are reluctant to take on these cases as there is no defence against it and it is purely down to the judge’s discretion. In response to the rising number of enquiries with deposit issues, Landlord Action has launched a fixed fee deposit claims mitigation service for landlords, to act on the landlord’s behalf in dealing with the court paperwork and also attempting to reduce the level of penalty the landlord faces.
Eddie Hooker, CEO of MyDeposits, one of the Government approved protection schemes, had this to say:
“The findings of Landlord Action are somewhat worrying, especially as all three schemes have seen a healthy year on year increase in the number of deposits being protected. Having said that, we should not become complacent and there is clearly more work to be done in ensuring that deposit protection is embraced by the entire private rented sector.
Landlords and agents should be aware that protecting the deposit with an authorised scheme is only one part of their legal responsibility. The other requirement is to correctly serve the Prescribed Information to the tenant and this is definitely an area where better understanding of the legislation is needed.
The majority of legal cases we see surround the incorrect issuing of the Prescribed Information, or failing to issue it all. All schemes have extensive information on how to comply with the legislation, including timescales on their websites and we urge letting operators to ensure they understand their obligations”.