Landlords who have failed to declare their rental earnings to HMRC are being warned to pay up or face higher penalties.
The Revenue is targeting widespread tax evasion on property lettings, and estimates that one million buy-to-let and other private landlords are not declaring their rental income, cheating the public coffers of at least £550 million a year.
A report in the Guardian says that some landlords are using inflated claims for letting expenses to pay less tax than they should.
“A lot of people are knowingly not declaring. We want to hammer down that £550 million – it’s significant money,” said an HMRC spokesman. ”
HMRC is running a Let Property Campaign to encourage landlords to come clean, or risk higher penalties.
As well as those with undeclared rental earnings from previous years, the campaign is aimed at landlords who have filed inaccurate tax returns.
Landlords who come forward voluntarily will still have to pay a penalty of up to 20 per cent – plus the tax and interest – but this compares with penalties of up to 100 per cent, and even the possibility of prosecution.
The campaign comes as many landlords have been enjoying record rents in a booming lettings market.
HMRC warns that landlords with unpaid tax who ignore the campaign’s “disclosure opportunity” are “playing a high risk game”.
Officials are obtaining data from letting agents, local authorities and elsewhere to track down those who do not come forward.