Nationwide warns landlords on tax

Permalink: Nationwide warns landlords on tax
by Gill Montia

Nationwide Specialist Lending is urging landlords to ensure that they declare their rental incomes correctly.

The warning from the buy-to-let lender follows recent reports that Her Majesty’s Revenue & Customs (HMRC) has begun a crackdown on property owners who are not declaring their full income.

HMRC has been compiling data on landlords via letting agencies for some years, and last year announced its intention to examine the finances of some buy-to-let landlords.

According to reports in the press, around 500 letters are being sent asking for clarification of rental incomes over the past six years.

Andy McQueen, director of the Mortgage Works and UCB Home Loans, explains that: “HMRC can use stealth tactics to find information on landlords who may not have declared rental incomes.”

He expects there may be some confusion among inexperienced landlords over what details they are required to declare, and is warning that some could face backdated tax bills.

In related news, Alliance and Leicester if predicting that, given the right advice, 33% of investor landlords could make an operating profit during 2008.

Professional landlords should fare slightly better, with 43% making an operating profit.