HMRC chases ex-pat landlords with AI technology

New AI technology helping government crackdown

Last year I wrote a blog about HMRC pursuing UK residents living overseas. Well, it seems that the government is re-doubling its efforts to clamp down on UK citizens living overseas, who might be avoiding paying tax. Their latest focus is the thousands of UK landlords living overseas. It seems that their success in this campaign is largely due to cutting-edge Artificial Intelligence (AI) technology.

Are you one of the thousands of UK landlords who are based overseas? If so, there’s every chance you’ve received a possibly unwelcome mailshot from HMRC. This is part of an intensified government campaign to make sure that every UK landlord is paying their due tax … wherever they live.

Maybe you’re one of the nearly 400 landlords who stepped forward voluntarily in the last tax year to disclose that they haven’t paid the full amount of tax on their rental income.

Urgent - reply within 30 days

If you’re not one of the 400, and you’ve received the mailshot from HMRC, then you have no time to lose. You have 30 days to respond. Failure will leave you liable to face penalties based on what HMRC believes you owe – or even criminal investigation for non-compliance.

How is the government so adept at tracking down these ex-pat landlords? It’s all down to its vast Artificial Intelligence (AI) database, called unsurprisingly, Connect.

The software enables HMRC to cross-check activity across numerous sources, such as –
– property disclosures on tax returns
– estate agents’ client lists
– land registry data
– social media profiles
– extraordinary spending patterns

This allows them to identify instances of tax avoidance and evasion. We estimate that Connect now generates 80% of HMRC’s tax investigations.

My advice? Don’t gamble.

You may be thinking, “I’ll be OK – I don’t use estate agents when I let my property.” No matter. Using data from the tenancy deposit scheme to cross-reference buy-to-let landlords against tenants declaring rental income, HMRC will still track you down.

My advice is not to gamble on your finances. HMRC is offering you, and other landlords in your position, the chance to bring your tax affairs up to date. Thinking of ignoring the threat? HMRC is making it pretty clear that you’ll be facing a full-blown investigation.

Recent years have witnessed endless changes to property tax law. Consider also changes to the non-residential capital gains tax rules (NRCGT). You may among the many overseas-based landlords who haven’t been able to keep up with UK tax law.

Have you inherited one or more buy-to-let properties? Or perhaps your property only generates you a modest profit. Don’t take the risk of believing that either of these scenarios means you’re excluded from having to make full declarations of your rental income.

Help and advice for a range of business issues

The answer, of course, is to declare all income from your property … wherever you’re based. This is where we come in. If you’re in any doubt about whether you’re disclosing everything that you should, give us a call – 0 20 3008 7822. Remember – we’re here to help.


This legal information is not the same as legal advice and you may not rely on our post as a recommendation of any particular legal understanding. Please, consult an attorney if you’d like to get advice on your interpretation of this article.

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