Let Property Campaign - What you need to know
If you are an independent landlord and have received rental income that you have not reported to HMRC, the Let Property Campaign applies to you.
You must continue reading if this applies to you in order to learn more about it and what it means to you.
What is the Let Property Campaign
HMRC states that “The Let Property Campaign is an opportunity for landlords who owe tax through letting out residential property, in the UK or abroad, to get up to date with their tax affairs in a simple way and take advantage of the best possible terms”
What happens if I haven’t declared rental income?
If you have unreported rental income, don't wait to be discovered since if HMRC writes to you, the penalties will be much, much worse if you owe money! When HMRC discovers a tax underpayment, this is referred to as a "Discovery Assessment," and the penalty structure is substantially harsher than if you notify HMRC right away that you have unreported income. In the worst-case situation, HMRC has the authority to investigate you under the Discovery Assessment and go back 20 years if it becomes out that your underpayment of tax was intentional.
Classification of Individual Landlord
There is confusion around what counts as an individual landlord, the following are classed as Individual landlords:
All landlords whether they have single or multiple rental properties
Specialist landlords with student or workforce rentals
Holiday lettings
If you rent out a room in your own house which reaches over the Rent a Room Scheme Threshold
Those living abroad or intending to live abroad for more than 6 months and rent out a property in the UK
What isn’t classified as an individual landlord:
Landlords renting out non-residential properties including:
Garages
Shops
Lockups
What do you need to do under the Let Property Campaign?
Make careful you notify HMRC of all rental revenue under the Let Property Campaign. By 5 October after the end of the tax year in which you begin to receive rental income, you are required to notify HMRC. You must notify HMRC by October 5, 2022, if you received rental revenue from a property during the tax year 2021–2022.
How would I disclose my rental income?
Your rental income can be disclosed via an HMRC online tool. You have 90 days from the time you tell HMRC of your intention to make a disclosure to submit the information and determine the tax and penalties you owe. You can either submit this yourself or you can nominate an agent such as an Accountant to look after this for you.
What details do I need to prepare the disclosure?
Calculate what you owe
The rental income for each year you haven’t informed HMRC about
Any allowable expenses on the undisclosed rental income
How much you owe in relation to any other income you receive and your personal tax code
The penalties that are due
Despite it being possible to do this yourself, it can be extremely stressful, at Cheylesmore Chartered Accountants we will take the stress away.
