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Let Property: HMRC compliance activity update

The flow of data to HMRC from a wide variety of sources has always been a useful tool in HMRC’s armoury. We expect to see a surge in compliance activity in this area for a couple of reasons.

Author: John Lewis - Senior Consultant - Tax Investigations

Firstly, Airbnb have confirmed that they are already providing HMRC with certain information concerning transactions which have taken place on their platform in relation to UK landlords. No doubt HMRC will be utilising that information to target landlords who have failed to meet their tax obligations.

For that reason, landlords who have either understated or failed to return their property income to HMRC should consider making a disclosure to HMRC sooner rather than later.

Secondly, last month the Government introduced the Renters (Reform) Bill into Parliament. One of the features of the Bill means that if it becomes law, a national database will be set up in relation to private rental accommodation.

The database would require all landlords to register themselves, as well as the properties that they let.

Whilst at present it is not clear whether HMRC would obtain access to this data, it would clearly be of interest to the department and likely that they would use their bulk data gathering powers to obtain it. The data provided by Airbnb provides an example of how HMRC are already utilising their bulk data gathering powers in practice.

By way of some background, since 2013, HMRC have achieved great success through the use of its Let Property Campaign (LPC), which provides landlords who owe tax through letting out residential property, the opportunity to bring their tax affairs up to date.

When introduced, it was originally estimated that approximately 1.5 million landlords had not paid the correct amount of tax. At present, HMRC have received disclosures from less than 10% of those landlords, however, for the reasons set out above this is likely to increase significantly.

Being proactive and making a disclosure to HMRC before they approach you directly will achieve a better outcome than delaying until that dreaded brown envelope comes through your letterbox.

The tax investigations team here at Markel Tax have a wealth of experience in handling various disclosures to HMRC, including those under the LPC.

To find out how we can assist you or your clients, please contact us at