The UK government’s recent introduction of the Renters (Reform) Bill has sparked a flurry of discussions among landlords, tenants, and taxadvisers.
At the heart of this reform is the creation of a national database for the private rental accommodation sector, known as the HMRC Landlord Database. This publicly accessible database is set to revolutionise the property rental sector, providing transparency and facilitating tax enforcement.
New Obligations for Landlords
Under the new legislation, all residential landlords will need to register for the database. This involves paying a fee and receiving unique identifier numbers for themselves and each property they register.
Marketing a property for rent without the appropriate registration will trigger a fine for the landlord.
The Power of the Privately Rented Property Portal Service
The HMRC Landlord Database will form the basis of the Privately Rented Property Portal Service.
Prospective tenants can view the list and confirm if a property is registered, providing a level of security and transparency that was previously unavailable.
Tax Enforcement and the HMRC Landlord Database
The HMRC Landlord Database is not just a tool for landlords and tenants; it’s also a powerful resource for tax enforcement.
HMRC may use the data within the database for compliance activities. The database will become even more potent once the Land Registry implements data requirements in the Levelling-up and Regeneration Bill to extend transparency of property ownership and transactions.
The Importance of Tax Compliance for Landlords
With the introduction of the HMRC Landlord Database, it’s more important than ever for landlords to ensure their tax affairs are fully up to date.
Making voluntary disclosure of any tax irregularities to HMRC before receiving a ‘nudge’ letter or opening a tax enquiry is advisable to reduce penalties.
As the HMRC Landlord Database comes into effect, it’s important for landlords to tread even more carefully now.
