New landlord database likely to help HMRC

On 17 May 2023, the Government introduced the Renters (Reform) Bill into Parliament. After it becomes law, a UK national database will be set up for the private rental accommodation sector. In outline, this will be a register of new and prospective landlords, properties which are (or intended to be) let under residential tenancies and other information. Information on the database will be publicly accessible.

The new database will provide the basis for the future Privately Rented Property Portal Service. The plan is that prospective tenants will be able to view the list and confirm if a dwelling that they are considering renting is registered - they will be able to report properties which are being marketed for rent which are not on the database.
 

New obligations for landlords

Although the Bill will have to be implemented with further regulations after it becomes law, there are some clear obligations for landlords:

• All residential landlords with need to register for the database
• They will have to pay a fee to register
• They will get unique identifier numbers for themselves as landlords and for each property they register
• They will not be able to market a property as available for rent unless they are registered as landlord (or prospective landlord) and the property has been registered.
• Marketing a property for rent without the appropriate registration will trigger a fine for the landlord.
   

While precise details of the registration rules have yet to be set out, it is likely (based on past similar exercises) that existing residential landlords will be given a deadline to register online and there will have to be specific arrangements to permit de-registration when a property is sold as well as special procedure to allow the data to be corrected where mistakes have been made.
 

Tax enforcement

The current Bill does not clearly set out that HMRC will get full access to all information submitted as part of the registration process. However, it is reasonable to assume that it will make use of publicly accessible data within the database for compliance activities.

More property data will also become available after the Land Registry implements the new data requirements in the Levelling-up and Regeneration Bill, which are also aimed at extending transparency of property ownership and transactions.

HMRC’s connect database already holds over 55 billion pieces of data, enabling HMRC to rapidly compare data sources and tax return entries to identify cases for enforcement activity. We expect that HMRC will combine any new data from the landlord database with that existing data drawn from both the Land Registry’s records, the Register of Overseas Entities owning UK property and the connect data.