Asked by Baroness Gardner of Parkes To ask Her Majesty’s Government
what steps they intend to take to ensure that HMRC share relevant
information with local authorities to assist those authorities to
identify landlords who are potentially in breach of the 90 day
restriction on short term lets and to enforce those
provisions....Request free trial
Asked by
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To ask Her Majesty’s Government what steps they intend to
take to ensure that HMRC share relevant information with
local authorities to assist those authorities to identify
landlords who are potentially in breach of the 90 day
restriction on short term lets and to enforce those
provisions.
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My Lords, I beg leave to ask the Question standing in my
name on the Order Paper and remind the House of my
interests as declared in the register.
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My Lords, the process is for local authorities to
initiate any request for information from HMRC. Any
disclosures of HMRC information must be lawful and
covered by the memorandum of understanding with the Local
Government Association. While sharing of data could
identify landlords who are letting property, this would
not identify landlords who are in breach of the 90-night
limit.
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I thank the Minister for that Answer but, given the fact
that the Tube now has a major promotion about how much
more money you can get by letting your property for
holidays, that the National Fire Chiefs Council has come
out very strongly to say that they are worried about the
fact that no one is responsible for checking these
properties, and that reinstating the registration
controls that were taken away would be very good—they
operated most efficiently until removed by the
Deregulation Act 2015 and most MPs were in favour of
reinstating them, as I understand it—will the Minister
put it to the Cabinet, or whoever he can put it to, to
consider reintroducing the right of local authorities not
only in London but throughout the country, if they wish,
to have registers of these short-let properties?
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May I commend the vigour and tenacity that my noble
friend applies to the subject, rivalling that of our
noble friend on retailers in
the high street? The Government are in favour of the
sharing economy; we believe that householders should have
the right to rent out their rooms or their property when
they do not need it, with the minimum of bureaucracy.
Increasingly, visitors to London, whether from overseas
or other parts of the country, expect to see a broader
range of accommodation than traditional hotels, and we
believe that that London should respond to this changing
market. Exceptionally, in London, this right is
constrained and it can only happen for 90 nights per
calendar year. Local authorities have powers to enforce
that limit. We have no plans to extend the powers of
local authorities beyond those which they already have to
inspect properties, nor do we have any plans to introduce
a register of the nature suggested by my noble friend.
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My Lords, why do we not turn the question round and place
a responsibility on local authorities to inform HMRC when
properties are rented in their areas, particularly if we
can build a register of landlords of properties? That
would enable HMRC to pick up the huge amount of tax that
is not paid by landlords who are avoiding tax in the
United Kingdom.
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The noble Lord raises an important issue about the
non-declaration of income from rented property. In 2013,
HMRC launched an initiative to address the so-called tax
gap. As a result, some 26,000 landlords came forward to
self-correct undeclared income and £150 million had been
collected by August 2017. Some 45,000 of what HMRC calls
“nudge letters” have been sent out where there is
third-party evidence of undeclared income. HMRC has a
fairly sophisticated IT system to collect data from a
variety of sources to track down income. Of course, it
can approach local authorities for information on, for
example, housing benefit or other information they may
have in order to safeguard the revenue.
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My Lords, the Minister seems to have focused the question
on tax avoidance or tax evasion, when the focus of the
Question from the noble Baroness, Lady Gardner, is on the
90-day limit and enforcement. Can the Minister tell your
Lordships’ House which local authorities are enforcing
this in London and which are not? It is all very well
discussing it, but if there is no enforcement, there is
no use.
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Responsibility for enforcement rests, as the noble Lord
recognises, with local authorities. They have quite wide
powers of enforcement, and potentially there is a £20,000
fine for breach of the 90-day rule if people do not
comply with the enforcement notice. Information would be
made available to local authorities if, for example,
neighbours or people in a block of flats felt that that
90-day limit was being extended. In addition, some of the
platforms with whom you register to rent out your
property now have a 90-day cap on the number of days you
can let out your property using that platform.
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My Lords, can my noble friend tell me whether the
Government will do anything to prevent persons who are
fortunate enough to have tenancy of social housing in
attractive areas, particularly in London, from
sub-letting that tenancy to people who are not authorised
to have such a tenancy?
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It is a breach of a tenancy agreement with a registered
social landlord to sublet, and if anyone had any
information that was happening, the local authorities
would take tough enforcement action to make sure that
people on the housing waiting list had access to that
accommodation.
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My Lords, until 2015, all landlords were able to charge
all property cost against taxation. That was stopped,
with the exception of holiday lets, the owners of which
can charge everything, including mortgage repayment,
against taxation. Are these London-focused lets subject
to the general Act, whereby you cannot claim relief, or
are they the same as holiday lets?
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I fear that that goes beyond my limited knowledge of the
tax system. They would certainly have to declare the
income; on whether they can set off against that income
the related costs of letting it, I would have thought the
answer was yes. Perhaps I can make some detailed
inquiries of HMRC to see which of the regimes the noble
Lord referred to—particularly regarding setting off
interest—is applicable to holiday lets.
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My Lords, I draw the House’s attention to my interests as
declared in the register. In Westminster, where I was the
leader until January last year, short-term lets are a
major problem, in some places pushing up property prices
both for let and purchase, in an area where we have very
short supply of housing. As a result of that, the
Government have set up a pilot with Westminster Council.
I would like to understand a bit about how that is
working and the details of it.
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My noble friend is quite right. There is now an umbrella
organisation for these platforms called the Short Term
Accommodation Association, which has developed a range of
measures, including a code of conduct. It has a
relationship with Westminster City Council called a
Considerate Nightly Letting Charter, which sets out the
responsibilities of property owners, managing agents,
freeholders and building managers and seeks to raise
standards in the industry. I understand that the charter,
which was launched on 5 March, is being distributed to
Westminster residents, so some of us will get that.
Updates will follow in due course, and the Government are
working with Westminster City Council to see whether this
pilot should be rolled out more broadly.
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My Lords, may I take the noble Lord back to the question
from the noble Lord, Lord Palmer? Does he have or can he
get the information about how many local authorities in
London are enforcing the 90-day limit, and can he confirm
whether such enforcement is a duty or merely an option
for those councils?
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As with all the powers under the planning Act, they have
a discretion over whether to use enforcement powers—it is
not mandatory. I do not have information on how many
local authorities have used the powers they have, but I
will endeavour to write to the noble Baroness and put a
copy of the letter in the Library.
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