The number of UK buy-to-let landlords admitting to not paying tax on their rental income has risen by 145% over the past year, according to research from accounting firm UHY Hacker Young.
Overall in the past year, 16,110 cases have been reported, up from 6,600 in 2017/18, with Birmingham reporting close to 500 cases alone.
The total amount of additional tax collected by HMRC from buy-to-let landlords admitting to unpaid tax on their rental income has also doubled over the same period, to £42m from £21m.
HMRC has been pressuring buy-to-let landlords, via its Let Property Campaign which warns landlords to the risk of avoiding taxation. The mailshotting campaign has encouraged landlords to declare unpaid tax – partly to avoid the full blown tax investigation that HMRC could impose.
Mark Giddens, tax partner at UHY Hacker Young, said: “HMRC sees the buy-to-let market as a source of hundreds of millions of pounds of unpaid tax. The amounts collected just from landlords coming in from the cold suggests they may not be too far wrong with that estimate.
“Buy-to-let landlords have been prosecuted and jailed both for under declaring rental income and for failing to pay CGT on the sale of buy-to-let properties.”
