If you're an individual landlord renting out residential property in the UK or overseas, the Let Property Campaign gives you the chance to bring your tax affairs up to date and to receive the best conditions available to pay the tax you owe.

If you have unreported rental income for which you owe tax, you must make a voluntary declaration to HM Revenue and Customs (HMRC).

You must inform HMRC that you want to participate if you want the best possible conditions. After that, you will have 90 days to figure out your debt and make a payment.

If you are an individual landlord renting out residential property, you may be able to report previously unreported taxes on rental revenue to HMRC under the Let Property Campaign.

 

This includes if you are:

·       Renting multiple properties

·       Renting out a single property

·       Renting out a holiday home even if you use it for yourself

·       Living abroad and renting out a property in the UK

·       Living in the UK and renting a property abroad

·       Renting out a room, in your main home for more than the rent-a-room scheme threshold

 

If you are a business or trust renting out a residential or commercial property, you cannot utilise this technique to declare unreported revenue.

Residential landlord tax evasion is a target for HMRC. To find persons who might not have paid what they owe, they will utilise the information they have on home rentals in the UK and overseas as well as other data they hold on clients.

If HMRC learns about your failure to make a voluntary disclosure now and prosecutes you later, your penalties could increase.

Since this campaign will last for some time, landlords who delay in coming forward and are subsequently the target of an investigation run the risk of facing harsher penalties.

It is better to go to HMRC and admit any errors than to wait until HMRC discovers them, especially if the mistakes were caused by misinterpreting the laws or purposely underpaying.

The Let Property Campaign provides the greatest conditions possible to organise your tax affairs. By letting HMRC know that you want to participate and working with them to make a full disclosure and payment, you can benefit from this.

You can inform HMRC of the penalty amount you think should be paid when you make your disclosure. Depending on why you didn't report your income, you'll have to pay a certain amount. You will incur a heavier fine if you withheld information from HMRC on purpose rather than accidentally.

No matter how many years you are behind on your tax affairs, if you registered for self-assessment, and filed tax returns within the required deadlines, but just made a careless error when declaring your income, you only pay for a maximum of 6 years.

However, it might be more difficult to persuade HMRC that it was just an error if you don't come forward and they discover later that you're overdue on your taxes. According to the legislation, HMRC is permitted to go back up to 20 years, and in extreme circumstances, HMRC may open a criminal inquiry.

 

All types of landlords are the focus of HMRC's compliance efforts, and those whom they believe may not have disclosed all of their rental revenue will be identified and contacted in writing.

 

To solve the problem, HMRC will conduct compliance audits or inquiries. The affected clients will then be unable to take advantage of the opportunity made available as part of this promotion.

 

HMRC will identify those whom they believe should have made a disclosure by:

·       comparing the information already in their possession with customers’ UK tax histories

·       continuing to use their powers to get more detailed information about payments made to and from landlords

 

HMRC typically imposes harsher fines when additional taxes are owed than are permitted by the Let Property Campaign. The fines might be as much as 100% of the outstanding debts or as much as 200% for income from offshore sources.

 

You must do the disclosure as you become aware that you owe tax on the letting income.

 

You can contact Cheylesmore Chartered Accountants to get more guidance on Let Property Campaign and avoid penalties.