Landlords urged to get taxes in order before database comes out

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The proposed owner database will be a ‘gold mine’ of information for tax investigators, meaning investors need to ensure their financial affairs are up to date before it arrives.

That’s according to the Dawn Register, head of tax dispute resolution at accounting firm BDO.

The Tenants Reform Bill does not clearly state that HMRC will have full access to all information submitted as part of the registration process, unlike the equivalent provisions for the Registration of Foreign Entities.

However, BDO said it is reasonable to assume that the tax authority will make use of the publicly accessible data for compliance activities.

Dawn Register, head of tax dispute resolution at BDO, said: “HMRC already has important insights into taxpayers’ financial affairs. The introduction of a new private rental sector database will leave few places to hide for non-compliant landlords.

“Any owners who currently do not pay the correct amount of tax would do well to update their UK tax affairs before registration is introduced.

“As well as providing peace of mind, making spontaneous disclosure should lead to lower tax penalties for errors, compared to rectifying errors after HMRC gets in touch. It will also help mitigate late-payment interest, which is currently at a 14-year high of 6.75% per annum and will increase to 7% as of May 31.”

HMRC has encouraged those who have made mistakes to voluntarily correct their position through the use of the Let Property Campaign, part of HMRC’s Digital Disclosure Service or other disclosure processes.

More property data will also become available after the Land Registry implements the new information requirements in the Regularization and Regeneration Bill, which also aim to broaden the transparency of ownership and property transactions.

HMRC will combine all new data from the owner database with what you can already access, such as records from the Land Registry, the UK Register of Foreign Entities owning property and data within the database itself. HMRC’s Connect data, which supposedly contains more than 55 billion pieces of data. .

The data analysis should help HMRC to identify cases for investigation, with a view to charging tax, late interest and tax-based penalties.