Buy-To-Let Tax Shock

by liamssoft | May 29, 2007 at 12:36 am

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Her Majesties Inland Revenue fears that UK buy-to-let property owners are not declaring their profits and notification obligations and is now taking tougher action to recover moneys that should have been paid.

The taxman is preparing to clamp down on tens of thousands of buy-to-let property owners who may not have paid enough tax, The Times has learnt.

HM Revenue & Customs has identified 80,000 landlords who may have claimed too much tax relief or have failed to declare the amount of rent they receive from the property, or a capital gain made on the sale of the property.

The Revenue can claw back unpaid tax from as far back as six years, which means that some of those who have bought properties to rent or are letting their own home could face tax bills so large that they may have to sell their property.

It also has the power to impose penalties, which can reach the same value as the unpaid tax bill, and charge interest on the sum.