Landlords called to account over business records

Student landlords and other property investors will find their businesses coming under scrutiny as the tax man investigates how well they are keeping their accounts. Landlords can expect a phone call from HM Revenue & Customs asking some tough questions about their business record keeping. If answers suggest the landlord is not on the ball with finances, a tax inspector will pay a personal visit to go through the paperwork. HMRC will check out all property businesses – including private and student houses in multiple occupation (HMOs), flat management companies, developers and holiday letting firms. The yellow-card visit will come three months after the call, so the landlord has a chance to bring their records up to date. If the inspector is not happy with the records, the case is escalated to a red-card offence and the landlord could face a fine. The Business Record Checks campaign is a new version of the controversial business visits scheme postponed in February 2012. Now, HMRC claims the checks will offer support to landlords rather than penalising them for failing to keep the right tax records. The program will roll-out, region by region over 14 weeks from November 26, 2012, starting with London and East Anglia. HMRC's Director of Local Compliance Richard Summersgill said: "We've listened to businesses and agents, and revamped our business records checks programme to make it more streamlined, targeted and better focused on education. "The visits offer benefits for businesses at risk of keeping inadequate records. Adequate records help businesses pay the right amount of tax at the right time, thereby avoiding interest and penalties for errors and late payment, whilst also giving HMRC greater assurance when a business submits its tax returns." The cancelled scheme visited 3,400 businesses between April 2011 and February 2012 and revealed a third (1,133) had record keeping issues, while 10% (113) needed follow-up visits. The HMRC guide to keeping business records is available for download.

Landlord blog

Sam Dickinson

Further reading

Students face higher rents and longer commutes - survey

Landlord buy to let deal choice hits historic peak

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