The recent ‘Panama papers’ data leak has put the issue of tax avoidance firmly back in the public spotlight

The Government has now said it is planning on introducing rules that would hold companies criminally responsible if their staff facilitate tax evasion, and this could influence the way estate agents and the lettings industry works.

Mark Hayward, managing director, of the National Association of Estate Agents, said the industry must pay attention to this, particularly when it comes to money laundering regulations.

Only this week, HMRC sent a tweet reminding professions such as estate agents of their money laundering regulations, followed by a Home Office consultation on reporting suspicious activity.

However, much of the furore over the Mossack Fonseca documents has blurred the lines over tax avoidance and planning, which is legal, and evasion, which is illegal.

Legitimate tax planning for landlords could mean incorporating – a complex issue which has its own costs and drawbacks as well as advantages.

Ryan Broomfield, of tax consultancy RSMUK, said landlords should take professional advice in assessing if it’s worth operating through a company.

Broomfield added: “There would no restriction on mortgage interest and you would pay corporation tax which is falling to 17% by 20220.

“A company can also benefit from indexation allowance, which takes account of inflation when working out a capital gain.

“You would need to weigh this up against the annual capital gains exemption a landlord would get when acting as an individual.

“Companies can also pay a dividend or keep cash in the business rather than everything being charged as income for individuals.”