Posts with tag: undelcared rental income

HMRC on Lookout for Undeclared Rental Income on Tax Returns

Published On: November 7, 2013 at 12:56 pm


Categories: Finance News

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Lenders and HM Revenue & Customs (HMRC) are targeting accidental landlords who let their previous home after moving.

Many of these landlords may not be aware that they must have consent from their mortgage provider before they can rent out their property when they move on.

In most cases, the lender will charge the homeowner a fee to change their mortgage terms, or raise the interest on their mortgage, to mirror buy-to-let loan rates.

Mortgage lenders are apparently searching through voter lists, and online letting listing to try and find offenders who are breaching their terms.

HMRC on Lookout for Undeclared Rental Income on Tax Returns

HMRC on Lookout for Undeclared Rental Income on Tax Returns

Mortgage brokers, who have been contacted for details of their clients, have warned accidental landlords.

Accidental landlords may also discover that their rental properties are not insured sufficiently, as standard home insurance policies do not cover let homes.

HMRC is also looking for those who do not declare rental income on their tax returns.

They are using the same methods as mortgage lenders to uncover accidental landlords, and also researching local authority housing benefit records, and Land Registry figures.

HMRC is offering an amnesty period for those who come forward and declare any past rental earnings.

Ray Boulger, from mortgage broker John Charcoal, says: “We know there are many borrowers who have let their property but failed to inform their lender.

“Before the financial crisis, lenders didn’t often check whether borrowers were still living in their property, but they are increasingly doing things like checking the electoral register to see who lives at an address and looking on letting websites such as Rightmove to see if a property is listed. These borrowers now run a much greater risk of being caught.”