Fresh from speaking to a room bursting with landlords yesterday there is clearly a lot of panic over Rachel Reeves’ tax invasion plans.
As someone that has crossed swords with HMRC professionally many times over I do wonder how they plan to make progress with the tax gap.
The gap, in case you’re wondering, is the shortfall between expected tax receipts and collected receipts. It’s currently estimated at some £36b a year. The NHS runs us at about £180b so the gap is a decent amount of money.
Labour’s manifesto pledge promised 5,000 more compliance officers within the walls of HMRC which would represent an almost 10% increase in their workforce. Depending on where they go and what they do this could signal a major moment for HMRC.
One of our team spent many years chasing taxpayers at HMRC and tells me they had a staggering amount of data on almost every taxpayer. They know most of the things you do and why but simply did not have the resource to follow up with as many people as they wanted to.
If HMRC get this right it will fundamentally change the tax landscape. At the moment too many people are evading tax in so many ways that would be very easy to spot and surely they will be the first to get a proverbial knock on the door.
Are you up to date? Is there anything you want to get off your chest? Now is the time to do it! HMRC have a few options for people to come clean. The Let Property Campaign has been running for years and is a great way to declare rental income and get your affairs up to date.
Not going to bother? Don’t worry! HMRC will help you! After all they can get access to:
- land registry and SDLT data
- local authority housing benefit payments
- council tax records
- insurance company data
- Gas Safe / EPC / EICR registrations
- Landlords lists from estate agents on the owners of managed properties
and so much more…. It’s pretty hard not to leave a trace in any of the above places so at the moment it’s just been capacity that has saved you. How long for though?