Landlords must beware the latest powers being sought by HMRC

, I do hope you will find space for the following article, which is a must-read for all landlords whom HMRC are currently seeking special powers to target: HM Revenue & Customs quietly issued its latest consultation document earlier this month to kick the holiday reading season off to a fine start. The riveting read entitled ‘Bulk and specialist information powers’ shouldn’t be dismissed lightly as it could grant some potentially venomous powers to Revenue and Customs that could be particularly painful for those landlords who have not been disclosing income from their properties. Of course no one likes a cheat and as a professional in the tax industry I am forever making sure that full disclosure is made by my clients of anything that may be relevant to their income or taxation affairs – as we all know, tax avoidance is legitimate but tax evasion is not. On reading through the 38 page tome one’s mind does wander to George Orwell’s classic dystopian novel of the life of Winston Smith, the rebellious civil servant, and one can’t help thinking that the document might have come from one of Oceania’s ministries – perhaps the Ministry of Plenty - as the powers it proposes are indeed potentially wide-ranging and far-reaching, accessing information from intermediaries such as accountants and letting agents. The topic of the consultation document is blandly described as ‘HMRC’s legal powers to obtain information about an unnamed taxpayer, whether in bulk or as part of a compliance check’ and the paper suggests that those who should read the document are ‘those who are or may become subject to HMRC’s powers to seek information’. All of us possibly? Letting agents have for a number of years, under the revenue’s existing powers contained in the Taxes Management Act 1970 and Statutory Instruments, provided information about rents that they have collected on behalf of their landlord clients, particularly where there has been a foreign element under the non-residents landlord scheme. The consultation documents take the powers to a new level – indeed the document often makes reference to a ‘New Framework’. Inevitably what it will gather is more and more information which it says ‘are essential if HMRC is to tell whether one return is more likely than another to be incorrect’. So what is the impact? Well if all the new powers are granted it would enable HMRC to force letting agents to supply the names, addresses and property details of all their clients, including those that just use the tenant finding service as well as those using their rent collection and management services. In my view this should act as an impetus for all those involved in letting property -from landlords renting rooms in their homes to those with extensive residential or commercial portfolios to ensure that they have a good advisor in place to check that they are making the most of all the reliefs and deductions that are available to set against their property incomes in order to minimise their tax liability – as well as disclosing all of their income before it’s too late! Paul Windsor is a partner at specialist UK real estate tax advisor WSM Property (www.wsmproperty.com) Contacts: Paul Windsor, WSM Property 020 8545 7606 paul.windsor@wsm.co.uk www.wsmproperty.com Lauren Alexander, Maltin PR 020 7887 1357 lauren@maltinpr.com www.maltinpr.com Notes to Editors: Paul is a regular commentator on property and finance trends, including taxation. Picture of Paul is available at www.maltinpr.com/paul-windsor Paul J Windsor BSc FCA - Background Information Paul is 51, married with 3 children and lives in Haslemere, Surrey. Paul has been a partner at WSM Partners LLP since 1985. WSM is a firm based in London, SW19 with a team of 30 professionals. The firm has two divisions,one specialising in the tax for individuals and small businesses and WSM Property specialising in UK real estate tax. Having started his professional career with KPMG Paul now believes passionately that clients of all sizes are best served by smaller specialist firms and to prove the point the firm currently works for international clients such as Citigroup, UBS and Deutsche Bank. The firm is at the leading edge of UK property tax work and deals with complex limited partnership vehicles, SDLT restructuring cases and offshore property unit trust structures. In 2006 the firm was a finalist in the Accountancy Age small firm of the year award and has also been accredited with the Investor in People award for many years. Paul is also Chairman of Polka Children's Theatre Limited, a leading national theatre company dedicated to bringing the performing arts to children and young people. Polka's productions are always highly acclaimed and set a gold standard for children's theatre around the world. Paul and his wife have an interest in property and own a small portfolio of rental properties in London where Paul is engaged as a non-executive director on three RTM company boards. Paul is a keen traveler and has travelled around the world with his wife, although France, Italy and Cornwall remain favourite destinations for family holidays. Paul is a member of Bosham Sailing Club where he keeps a couple of racing dinghy's and is a qualified costal skipper, enjoying sailing in the Solent,the Channel, the Mediterranean and the Virgin Islands. In his spare time Paul enjoys shooting, skiing and gardening. Kind regards, Lauren Alexander Media Director Maltin PR Berkeley Square House Berkeley Square London W1J 6BD T +44(0)20 7887 1357 F +44(0)20 7887 6001 M +44(0)7515 664 338 www.maltinpr.com