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  "path": "/money/hmrc-landlord-tax-loophole-crackdown",
  "publishedAt": "2026-04-29T16:13:20.000Z",
  "site": "https://www.gbnews.com",
  "tags": [
    "HMRC admits MILLIONS pay higher tax due to 'unchanged' policy backed by Rachel Reeves",
    "HMRC tax refund warning as one million people miss out on £473 average payout",
    "Fuel duty revenue falls as drivers cut back on driving amid rising costs and global tensions",
    "The GB News Editorial Charter"
  ],
  "textContent": "\n\n\nHM Revenue and Customs (HMRC) has launched a crackdown on buy‑to‑let investors using limited liability partnerships to reduce their tax bills.\n\nThe tax authority issued guidance stating that schemes designed to bypass mortgage‑interest relief restrictions and minimise property‑income tax liabilities do not operate as claimed.\n\n###\n\n\n\n\nLandlords who have entered into these arrangements could now face fines, interest charges and higher tax demands.\n\nHMRC said it will apply anti‑avoidance rules to ensure rental income remains taxable in the hands of the original owner.\n\n###\n\n\n\n\nTRENDING\n\nStories\n\nVideos\n\nYour Say\n\n###\n\n\n\n\nA spokesman said: “Our view is clear – these arrangements simply do not work and can leave users facing higher tax bills, interest and penalties.”\n\nThe schemes gained popularity after changes introduced by former chancellor George Osborne in 2015, which restricted mortgage‑interest tax relief for landlords to the basic rate.\n\nThe policy increased tax liabilities for investors with larger property portfolios, prompting accountancy firms and promoters to market LLP‑based structures as a workaround.\n\nHMRC has now urged landlords currently using such arrangements to withdraw from them.\n\n###\n\n\n\n\n###\n\n\n\n\n###\n\n\n\n\nPrevious reporting indicated around 400 buy‑to‑let investors could face tax bills reaching six figures as a result of participating in these schemes.\n\nWhile LLPs can be used legitimately in certain circumstances, HMRC is targeting structures created primarily for tax avoidance, including those where profits are allocated to corporate members to reduce overall tax exposure.\n\nMichelle Denny‑West said: “The tax landscape for landlords has become so onerous and expensive that landlords are looking for loopholes to reduce their exposure.”\n\nShe added that most participants believe the schemes are legitimate, but “HMRC knows that the genuine economic ownership doesn’t change – they’re going to tax you as an individual.\n\n### LATEST DEVELOPMENTS\n\n\n\n\n  * HMRC admits MILLIONS pay higher tax due to 'unchanged' policy backed by Rachel Reeves\n  * HMRC tax refund warning as one million people miss out on £473 average payout\n  * Fuel duty revenue falls as drivers cut back on driving amid rising costs and global tensions\n\n\n\n###\n\n\n\n\n###\n\n\n\n\n\"Quite often, high fees are paid to promoters, and in the end the taxpayer suffers.”\n\nBen Proctor said: “Unfortunately there seems to be a ready market for people who can be persuaded to dodge tax.\n\n\"Promoters take high fees, then dodge responsibility by disappearing into the ether – it’s a fraudulent system that works.”\n\nHe said affected landlords can face significant additional costs once HMRC challenges the arrangements, with interest charges and penalties increasing liabilities, particularly where cases take time to resolve.\n\nThe structure, sometimes described as a hybrid model, typically involves transferring property interests into an LLP, then adding a limited company as a corporate member to receive profits.\n\n###\n\n\n\n\n###\n\n\n\n\nPromoters claim this allows income to be taxed under corporation‑tax rates rather than higher personal income‑tax bands, and that finance costs such as mortgage interest can be deducted within the corporate structure.\n\nHMRC has made clear it will challenge these claims using existing anti‑avoidance legislation, attributing income based on underlying economic ownership rather than the structure used.\n\nPromoters of such schemes may also face enforcement action.\n\nThose selling tax‑avoidance arrangements are required to disclose them to HMRC, with failure to do so carrying penalties of up to £1million.\n\nLate disclosure beyond five days can trigger additional daily fines starting at £600.\n\n###\n\n\n\n\n\n\n\n\n\n\n**Our Standards: The GB News Editorial Charter**",
  "title": "HMRC landlord tax loophole crackdown as Britons warned avoidance schemes 'do not work'"
}