In a recent statement, Aatif Malik, a renowned accountant, raised concerns over the impending Renters Reform Bill, cautioning that its enactment into law would provide HMRC (Her Majesty’s Revenue and Customs) with a tool to extract maximum tax from landlords.
Malik specifically highlighted a key provision within the Bill, the establishment of a digital private rental property portal, asserting that it would have far-reaching implications for resident and non-resident landlords as well as investors, significantly altering the landscape of rental income taxation.
Expected to be launched in Autumn 2025, subject to the Renters (Reform) Bill receiving the Royal Assent in early 2024, the Property Portal aims to streamline communication between landlords, tenants, and local councils, creating a centralized platform catering to all stakeholders within the private rental sector.
Under the forthcoming legislation, landlords will be obligated to register themselves and their properties on the portal. Failure to comply with these regulations may result in substantial financial penalties. Malik further cautioned that repeated breaches or serious offenses could trigger investigations by the Fraud Investigation Service, a specialized division within HMRC that deals with cases involving losses exceeding £100,000 to the national exchequer.
Describing the Bill as a “clarion call” for landlords to ensure full compliance with their financial and tax obligations, Malik emphasized that waiting for notification letters from HMRC under initiatives like the Property Let Campaign or Undisclosed Income could lead to penalties, exacerbating the financial challenges already faced in today’s precarious economic environment.
In addition to the aforementioned measures, the Renters (Reform) Bill also highlights the continuation of selective licensing, with the potential for new licensing areas to be identified through the digital portal. Malik cautioned that landlords who fail to adhere to licensing requirements, particularly if they have yet to declare their property income, could face heightened risks.
Malik concluded by asserting that thorough preparation is the best defense for landlords in the face of the current economic climate’s challenges. He stressed the importance of understanding and fulfilling obligations under the new reforms, enabling landlords to navigate the changing landscape and safeguard their financial interests.
As the Renters (Reform) Bill progresses, the implications of the digital property portal and its potential impact on tax collection from landlords remain subjects of keen interest and debate within the real estate community.