TAX MAN TARGETS LANDLORDS

Any property landlords who are pocketing the cash and giving two fingers to the tax man had better watch out.

The Inland Revenue is being given new and sweeping powers to chase up tax dodgers.

Top of the list are seriously rich individuals – those who are trying to avoid the new 50 per cent top rate tax band which comes into force soon – and landlords who have been trying to get away with it all.

The Revenue is going to trap errant landlords by forcing lettings agents to reveal details of all their previous clients.

At the moment the Revenue can only ask letting agents to give them the names of landlords for whom they currently collect rent.

But under the new arrangements it will be able to demand that letting agents give them details of any landlords who they introduced to tenants for a fee in the past. And this will apply even if rent is now paid directly to the landlord.

Renting experts reckon this move might winkle out landlords who are on- the- make. But it will also create the need for a lot more paper work on the part of letting agents. Letting agents will have to be scrupulous about keeping detailed records.

The Revenue is urging any buy-to-let landlords who have undisclosed income to reveal themselves and to face the music. It is understood that ‘confession’ might help to mitigate penalties.

The Revenue crack-down on the very rich is partly aimed at destroying methods being promoted by accountancy companies who are trying to sell their clients schemes which get round the 50 per cent tax threshold.

Some schemes involve employees taking share options instead of cash bonuses which would be subject to capital gains tax rather than income tax.

But under its new powers the Revenue will be able to demand that accountancy firms identify and give the addresses of their clients who might use such schemes.

The new get tough stance by the Revenue comes hot on the heels of news that offshore taxpayers and overseas tax-avoidance schemes are being targeted more rigorously.

The Inland Revenue estimates that it will get £500m from offshore savers and £300m from buy to let landlords.