Letting agents charge for HMRC disclosure

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    Letting agents charge for HMRC disclosure

    I hear that HMRC are requiring letting agents to provide rental income data, to cross reference with landlord tax declarations. Fine. But I was surprised to get a £40 bill from my letting agent for processing such a HMRC request. Is this normal/legal? Are all lettings agents doing this?

    #2
    I have never heard of such a thing and without your consent I'd think the information would breach data protection?

    There are other factors and expenses to take into account when submitting a tax return not just the rental income, could it be that you have personally been suspected of fraud?

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      #3
      We have had to make a disclosure for a few years now but I am surprised an agent charges for it. HMRC make it very clear on the literature they send out that we are obliged to provide the information and we can't charge them for it. For us it is perhaps a few hours work to do it for all our landlords as our property software does it for us and if I charged every one £40 for doing it I would be a very happy man indeed. If the OP looks in his original terms and conditions there may be something tucked away that allows his agents to make a charge? We just look at it as yet another role the government want us to take on just like immigration checks, I can't wait for what they've got in store next.....

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        #4
        No one, including letting agents can charge for something you haven't agreed to (but it might be hidden somewhere in the Ts and Cs - possibly as a miscellaneous admin fee).

        I would point out that you haven't asked them to do this, HMRC require it and so it's a cost to them of being a letting agent, not a service that they provide to you.
        You'd be very happy to instruct them not to perform the task (not that the agent can say no).
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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          #5
          And charge them £40 for sending that letter/email.....
          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

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            #6
            Originally posted by Wright76 View Post
            I have never heard of such a thing and without your consent I'd think the information would breach data protection?
            Assuming HMRC's demand is legal in the first place, i.e. some law requiring a LA to comply with such demand, then no it wouldn't breach data protection since any disclosures would be required by law.
            I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

            I do not answer questions through private messages which should be posted publicly on the forum.

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              #7
              I presume mydeposits and the DPS also open their databases to HMRC, as does the land registry and your bank. None of these charge you every time they receive a request.

              But artful's suggestion is definitely the best.

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                #8
                Para 1, Schedule 23 to the Finance Act 2011 and there are financial penalties if agents do not comply. An agent is under an obligation simply to report the rent they receive so if we manage a property we may have 12 months rent to report and if we provided a tenant find service we just report the first months rent. They do not ask what our fees are or about any expenditure we incur on the landlords behalf as I assume it would be too time consuming to double check every aspect of a landlords tax return. We have done this for overseas landlords for many years and I think we have done this for UK based landlords for the last two or three years.

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                  #9
                  Nowt to worry about:. We're all 100% legal, all declared.

                  I sincerely hope these measures catch a few more rogue cheating crooks & the country gets the money it should - & so needs.
                  I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

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                    #10
                    Thanks for quoting the relevant law goobs.

                    I actually had no idea that hmrc could request such information without cause.

                    Whilst I agree it's a good detection of those that are commiting fraud I think it's appalling that it's done as standard without any allegation that fraud is ring commited. It feels a bit like big brother!

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                      #11
                      goob27 you are still required to inform LL of your Find Only fees in your Contract, if you expect to be paid.

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                        #12
                        Yes, I wouldn't expect to get a fee if it wasn't notified in advance. You would be surprised how many people sign stuff without actually reading it though as many posts on here show. There really isn't anything I can charge for without telling the landlord first and it doesn't seem very fair to charge a landlord for giving their financial information to HMRC.

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                          #13
                          Well I'll be!

                          I'd not heard of this, not an agent or landlord, so that's not surprising. But it caught my attention!

                          I have just been snooping, sorry, researching other clerks websites, revamping my own offering, keeping up to date with the very latest digital offerings, and I had a quick look at their fees - many clerks are also LAs. OMG! £75 +VAT quarterly fee "To remit and balance the financial return to HMRC quarterly – and respond to any specific query relating to the return from the landlord or HMRC"

                          How on earth can it cost £360 a year, per landlord - that can't be per property, can it?

                          Comment


                            #14
                            Quarterly returns are only needed for overseas landlords without an NRL approval number and the answer of course is that it doesn't cost anything like that to do quarterly returns but the flip side is that if landlords got their financial affairs in order then they would have an approval number so letting agents wouldn't have to act as a tax collector. We have to collect tax for overseas landlords without an approval number and send it off to HMRC each quarter then give the landlords a certificate at the end of the financial year to say that we have paid £x tax on their behalf. We don't have many landlords without an approval number so thankfully the task isn't difficult but if numbers increased I would want to introduce a charge into my T's and C's not to make money on it but to encourage landlords to sort things out before leaving the country.

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                              #15
                              Thanks, that makes more sense.

                              And shows that not only were they extortionate but they were also badly written... no mention of it being for overseas landlords in there!

                              Comment

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