Landlords Warned To Pay Taxes Or Face Jail

HMRC has signalled a tougher regime for landlords who fail to declare their rental income. 

One of HM Revenue & Customs (HMRC) chief fraud investigators has warned any landlord evading tax will face prosecution. 

Tax investigations are also likely to stretch back for at least six years. 

The warning follows Chancellor George Osborne withdrawing tax breaks for landlords such as mortgage interest relief, wear and tear allowances and hiking stamp duty. 

Alan Tully, assistant director of HMRC’s fraud investigation service, said: 

“HMRC takes tax fraud extremely seriously, and anyone deliberately choosing to evade their taxes will be prosecuted.

“This sends a clear message and I urge anyone with information about individuals or businesses involved in tax fraud to call us.”

Tully was speaking after businessman Mazhar Majeed, 40, was jailed for two years for not declaring rents from a multi-million-pound property portfolio and failing to pay income tax and capital gains tax on property business profits. 

Majeed, who lives in Croydon, Surrey, was a sports agent and former owner of Croydon Athletic Football Club. 

HMRC started a tax evasion investigation in June 2010 when documents revealed that Majeed had not declared £259,000 income from a property development business and rental properties on tax returns between 2006 and 2011. 

The money included profits on the sale of properties. Majeed was arrested by HMRC in August 2010 and admitted to tax fraud at Croydon Crown Court in November 2014. The sentence was delayed until November 2015.

“Majeed was a very wealthy businessman who tried to wriggle out of paying his fair share of tax,” said Tully. “He selfishly stole money that should have been used to fund vital public services and he now must pay the price for his dishonesty.”