Newham Landlords Avoid Paying Tax

Thousands of landlords in Newham have allegedly avoided paying millions of pounds in tax, an issue which could be costing the taxpayer hundreds of millions should the epidemic be spread further afield.

There have been suggestions that London landlords owe up to £200 million in unpaid tax levies following reports that up to 13,000 landlords in Newham failed to declare their income. This amounts to over half the 27,000 landlords registered as operating within the borough.

Any landlord receiving at least £2,500 a year in rent is required to register for tax self-assessment, however 13,000 have failed to do so. If this trend is mirrored across London, the taxpayer is likely losing out on up to £200 million in unpaid revenue.

Newham Council was the first borough to introduce a compulsory landlord licensing scheme in 2013. This has recently led to a dispute between the council and the Government, with the latter claiming that compulsory registration adds unnecessary costs for reputable landlords. Newham opted to share its register with HM Revenue and Customs (HMRC) in order to expose landlords that are not paying their fair share of tax. 

Sir Robin Wales, Mayor of Newham, sent a letter sent to Chancellor Philip Hammond, and 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. 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.’

A spokesperson for the Residential Landlords Association added: ‘We condemn any landlord that does not pay the tax that they are legally obliged to.’

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