Despite the fact there are believed to be an estimated 1.4 million landlords in
the UK at the current time, only 500,000 have contacted HM Revenue & Customs to
register their income. Many of the landlords own second homes or holiday homes,
which they let out to generate some extra income, but this doesn’t excuse them
from paying tax on their profits.
HMRC Targeting UK Landlords
UK accountancy firms are warning landlords that HMRC is targeting them. The
government is concerned about the estimated £550 million in unpaid tax and is
trying to do everything in its powers to recoup the money. Landlords who have
failed to register with HMRC face being investigated and fined if it is found
that they have unpaid tax.
Many buy to let properties have been bought in the recent property boom and
although first time buyers are finding it hard to secure funds, older buyers and
those with a large deposit have had very little problem. Landlords purchasing a
property with a buy-to-let mortgage only have to provide a decent deposit and
show that they can afford the repayments based on the estimated rental income of
the property.
Bank of England to Look at Buy To Let Lending
However, the Council of Mortgage Lenders is warning that landlord mortgages
could soon be coming under the scrutiny of the Bank of England. There are also
tough new EU rules coming into effect soon, which will also affect buy-to-let
lending, so landlords may soon find it a lot harder to secure funding.
