The current ‘Let Property Campaign’ by HMRC 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 and take advantage of the best possible terms.
If you make a full and voluntary disclosure of all unpaid liabilities in these circumstances you can usually expect a lower penalty than HMRC would otherwise seek if they raised an enquiry or compliance check without the disclosure. To benefit from the reduced penalties offered, HMRC will take account of the level to which you’ve helped them and the accuracy of the information you provided.
Therefore if you have undisclosed income from property letting, now is the perfect time notify HMRC that you want to take part in the Let Property Campaign and tell them about all income, gains, tax and duties you’ve not previously disclosed.
If you declare it now under the Campaign you’ll then have 90 days to calculate and pay what you owe.
When you make your disclosure you tell HMRC how much penalty you believe you should pay. What you pay will depend on why you’ve failed to disclose your income. If you’ve deliberately kept information from HMRC you’ll pay a higher penalty than if you have simply made a mistake.
You may not have to pay any penalty at all but if you do it is likely to be lower than it would be if HMRC finds out you’ve not paid enough tax.
Do not worry if you cannot afford to pay what you owe in one lump sum, if your circumstances warrant it, you’ll be able to spread your payments.
If you registered for Self Assessment and completed tax returns within the appropriate time limits, but have simply made a careless mistake when declaring your income, you only pay for a maximum of 6 years - no matter how many years you’re behind with your tax affairs.
However, if you do not come forward and HMRC finds later that you’re behind with your tax, it may be harder to convince them that it was simply a mistake. The law allows HMRC to go back up to 20 years and in serious cases HMRC may carry out a criminal investigation.
The Let Property Campaign is open to all residential property landlords with undisclosed taxes. This includes:
- those that have multiple properties
- landlords with single rentals
- specialist landlords with student or workforce rentals
- holiday lettings
- renting out a room in your main home for more than the Rent a Room Scheme threshold
- those who live abroad or intend to live abroad for more than 6 months and rent out a property in the UK, as you may still be liable to UK taxes
This campaign is not open to those landlords who are letting out non-residential properties such as a shop, garage or lock up. It also cannot be used by those wishing to disclose income on behalf of a company or a trust.
Unlike previous campaigns, there is no disclosure ‘window’ requiring you to disclose what you owe by a specific date. This campaign will be ongoing for some time; however, landlords intending to come forward who delay, risk higher penalties if they are subject to an enquiry and they have not already notified an intention to disclose.
If you need help to calculate what you owe, Kingston Burrowes will be pleased to advise and help you prepare your declaration. This is an opportunity to stop worrying about what might happen and get things set up correctly to avoid penalties in the future.
For more information about the HMRC Let Property Campaign visit the HMRC website here or call the HMRC Let Property Helpline: 0300 123 0998