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HMRC begins buy-to-let 'crackdown'

HM Revenue & Customs (HMRC) have launched a tax crackdown on buy-to-let investors.

The move follows concerns that many landlords are not paying their fair share of tax - and could result in many being prosecuted in court and fined.

Letters have been sent out to investors suspected of tax avoidance by HMRC, warning them of their legal obligations.

A common way of dodging tax among landlords is to let out a property without officially declaring the rent.

Commenting on the move, accountant at Wilkins Kennedy Peter Goodman said: "Until now inquiries have been pretty piecemeal, so this is a real change in tactics - people who refuse to cooperate could ultimately face criminal prosecution."

However, there is no suggestion that all landlords implicated in the tax crackdown are breaking the law on purpose.

Chas Roy-Chowdhury at the Association of Chartered Certified Accountants commented: "Tax rules for renting out property are confusing and it's easy to make a mistake."

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