HMRC ‘turns up the heat’ on holiday home owners

Thousands more landlords are being caught out for not declaring income from holiday homes abroad as the Government steps up investigations into tax avoidance.

Tax on income from rental properties overseas has jumped by 17pc amid crackdowns by HM Revenue & Customs, data from a Freedom of Information request has shown.

The number of British taxpayers declaring income from an overseas property rose from 78,000 in 201617 to 81,000 the next year, the most recent for which data are available.

Matthew Grief of Moore, the accountancy firm that submitted the FOI request, said: “We expect income declared to be even higher this year as HMRC has really been turning up the heat on overseas landlords.”

The maximum penalty for failing to declare overseas income is now double the tax owed. The tax office has also started to collect data from foreign bank accounts and investigators gather evidence by monitoring the social media accounts of people they suspect of owning an overseas rental property.

Last summer HMRC sent out blanket letters to tens of thousands of individuals with overseas investments and bank accounts, telling them to get their tax affairs in order – even if they did not owe any tax.

At the time the tax office insisted it was not suggesting that people had done anything wrong.

A spokesman said: “Where possible, we seek to help customers get their tax right as early as possible through targeted education and support, but respond strongly to those who bend or break the rules.”