London landlords ‘avoiding £200m in tax’ by not declaring income

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HMRC said to be investigating reports that 13,000 renters did not declare rental revenue

Thousands of landlords in just one London borough are believed to have avoided paying millions of pounds in tax, prompting suggestions that there could be up to £200m in unpaid levies across the capital.

Newham Council said up to 13,000 landlords had failed to accurately declare the income they receive from renting out properties – over half of the 27,000 landlords registered as operating in the borough.

The council said the 13,000 had not registered for tax self-assessment, which is a requirement for landlords receiving at least £2,500 a year in rent.

It said a similar trend in the rest of London would mean the taxpayer is losing out on almost £200m in unpaid revenue. Applied across the country, the figure is likely to be much higher.

Newham Council was the first to introduce a compulsory landlord licensing scheme in 2013. It has now shared its register with HM Revenue and Customs (HMRC) in an attempt to uncover landlords that are not paying their fair share of tax.

In a letter sent to Chancellor Philip Hammond, Sir Robin Wales, Mayor of Newham, wrote: “It is our understanding that, to date, up to 13,000 Newham landlords are of interest to HMRC, where there are discrepancies between declared income and our records, with potentially significant financial implication for the exchequer.”

“Our core grant funding has halved since 2010-11, that’s less money for our schools, less money for social care, and less money for housing. I urge you to assess the additional benefits of Newham’s licensing scheme in assisting the exchequer to address tax evasion by landlords.”

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Written by: Houseladder