Short-Term Letting

Lord Campbell-Savours Excerpts

Thursday 26th April 2018 Lords Chamber

[Lord Young of Cookham]

May I commend the vigour and tenacity that my noble friend applies to the subject, rivalling that of our noble friend Lord Naseby 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 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.

[Lord Campbell-Savours (Lab)]

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.

[Lord Young of Cookham]

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.