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Half of Newham landlords could be failing to declare rental income, council claims

PUBLISHED: 14:04 15 August 2017 | UPDATED: 15:09 15 August 2017

Newham mayor Sir Robin Wales

Newham mayor Sir Robin Wales

Newham Council

Almost half of Newham landlords are failing to declare their rental income to HM Revenue & Customs (HMRC), Newham Council has estimated.

Almost half of Newham landlords are failing to declare their rental income to HM Revenue & Customs (HMRC), Newham Council says.

The warning, highlighted in a letter from Newham mayor Sir Robin Wales to chancellor Philip Hammond, revealed 13,000 out of 26,254 landlords had not registered for self-assessment after signing up for the private rented sector (PRS) licensing scheme.

The borough-wide programme, first introduced in 2013, requires Newham landlords to licence any property offered for private rent.

It comes to an end in December and its renewal is under threat due to stricter restrictions being imposed by the government.

Sir Robin wrote: “It is our understanding that, to date, up to 13,000 Newham landlords are of interest to HMRC, where there are discrepancies between declared income and our records, with potentially significant financial implication for the exchequer.”

The letter also highlighted data carried out by Institute for Public Policy Research (IPPR) in 2014 which estimates that the amount of undeclared tax in London totals more than £183 million.

Sir Robin went on to write: “Tax evasion at every level takes money from vital services, including from health, education and local government.

“This is money out of the pockets of our poorest residents who rely on our services the most.

“Our core grant funding has halved since 2010-11, that’s less money for our schools, less money for social care, and less money for housing. I urge you to assess the additional benefits of Newham’s licensing scheme in assisting the exchequer to address tax evasion by landlords.”

Since its introduction, the PRS scheme has enabled 1,135 prosecutions for housing crimes to take place, totalling 70 per cent of the overall figure in London.

The programme receives huge support from residents, while three other London boroughs have followed Newham’s lead.

HMRC said it did not recognise the figure of 13,000 landlords put to it by the council.

A spokesman said: “We are working with the London Borough of Newham as part of the Let Property Campaign [HMRC tax disclosure scheme].

“This work has generated £115m in additional and previously unpaid tax and interest.”

The Treasury said it was a matter for HMRC only.

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