HMRC is after you

There has been a warning to landlords that their letting activity could be under scrutiny from the HMRC.

Former letting agent, and blogger Sam Collett, has reported correspondence received from the HMRC which reads:

Dear Sir/ Madam,

I will soon be sending you a statutory notice under paragraph 18 of Schedule 23 to the Finance Act 2011 requiring you to send me a return of information.

I believe that your business may involve acting as a letting agent on behalf of property landlords.  I am writing to let you know that I will soon be sending you a notice under the above legislation.  That notice will require you to send me a return of gross rents that you have collected in the year ended 5 April 2014 on behalf of property landlords (including limited companies).

What information will I want from you?

We need to know about rents you have collected from tenants on behalf of landlords who have used your letting agency services in the year ended 5 April 2014.  We will use that information to check that the landlords declare the rents on their tax returns.  To request this information I will soon be sending you a statutory information notice.  This notice will require your return within 60 days of the date of the notice.  

This is not a check of your tax affairs.  We will only use this information to check that landlords have declared their rental income correctly.

….In respect of each landlord you will need to give the following particulars in your return:
- the name and address of the landlord for whom the rents were collected;
- the total gross rent collected from the tenant for the landlord for the year ended 5 April 2014;
- the address of the let property to which the rent relates

This warning to landlords using a letting agent shows that the HMRC continue to look to find landlords that don't declare their rental income and using 3rd party sources of information is very much part of their strategy.

Landlords income tax advice