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Action Urged From UK Gov't On Property Sector Taxation

by Amanda Banks,, London

16 August 2017

Significant tax evasion among UK landlords has been uncovered as a result of a council in London disclosing information about landlords' activities, prompting calls for a nation-wide review of enforcement efforts.

According to the Mayor of Newham, Robin Wales, up to 13,000 landlords in his London borough have made inaccurate tax declarations or failed to declare income from renting out property. He said that undeclared tax among these landlords is likely to have been worth up to GBP183.1m (USD235.3m) in 2014. This was made possible through the London Borough of Newham borough-wide private rented sector licensing scheme, which includes information sharing to assist the Exchequer in ensuring that landlords meet their financial obligations.

In a letter to the UK Chancellor, Wales said that a review should be undertaken covering the remainder of London and the rest of the UK.

Recently, Transparency International UK released a report warning that London properties are being purchased through companies anonymously, with no policy changes on the horizon in the UK. An investigation by the organization found that over a third of properties sold in a new Kensington and Chelsea development were purchased via anonymous companies, many based in the British Virgin Islands.

The organization said the Government should require the disclosure of property ownership, to ensure tax collection and to ensure the funds used to acquire UK property aren't from illicit sources.

Elsewhere, Camden Council (another London borough) has recently called for powers to levy higher Council Tax on privately owned unoccupied properties, given the housing shortage in the capital and soaring rental and house prices.

"To discourage these ghost homes, we have repeatedly proposed that the Government let us increase the Council Tax. We are allowed to charge on furnished properties left empty," said Councillor Theo Blackwell, Camden Council Cabinet member for Finance, Technology, and Growth. "Increasing charges 50 percent had an effect, but town halls need stronger tools."

TAGS: compliance | tax | tax compliance | tax avoidance | law | United Kingdom | Virgin Islands | HM Revenue and Customs (HMRC) | HM Revenue and Customs (HMRC) | British Virgin Islands

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