If you are a property landlord maybe with holiday lettings, multiple properties, single properties or in particular student properties, then HMRC will be on your back for the next 18 months. Fewer than 500, 000 landlord tax payers are registered with HMRC when they think the figure should be nearer 1.4 million. HMRC will be looking to track down those who for whatever reason are not disclosing their rental income correctly.
In December 2013, HMRC launched their ‘Let Property’ campaign. It is a scheme aimed at landlords who have either misunderstood or ignored the need to pay tax. On the one hand the campaign is a little like an amnesty and an opportunity for all those who haven’t declared, (maybe because they didn’t realise they had to) all their rental income. On the other hand it is a get tough campaign.
If you believe, on reflection, you owe back tax for undeclared income you may contact HMRC and suggest how much your penalty should be. Each case is different and what you will pay will depend on the circumstances, but during the campaign voluntary disclosure will be encouraged and penalties will in all likelihood be less than they would be otherwise. If however, the correct rental income is not disclosed then the penalties will be much higher and in some cases criminal prosecution will follow.
In the last few years many people have become ‘accidental’ landlords. They may have moved house, not been able to sell the previous home and rented it out. However you may have become a landlord it makes sense to check your paperwork and make sure HMRC has the complete picture.
For more information, email firstname.lastname@example.org.