Disclosure opportunity for landlords
Landlords that may owe tax, whether through misunderstanding of the rules or deliberate evasion, are being targeted by HMRC in a campaign that was launched last year. Unusually, the campaign does not currently have a finish date and will run until at least March 2015. HMRC will allow landlords to come forward voluntarily throughout the entire time period that the disclosure opportunity remains open.
HMRC has confirmed that taxpayers that come forward voluntarily as part of the initiative will receive better terms and lower penalties than if targeted by HMRC. From this year, any landlords that have not declared all their rental income may be contacted by HMRC. The landlords will then lose the opportunity to make a disclosure as part of the campaign. Landlords who are targeted by HMRC can face penalties of up to 100% of the tax due together with possible criminal prosecution.
The campaign is open to all residential property landlords, that according to HMRC includes those that have multiple properties and single rentals as well as to specialist landlords such as student or workforce rentals and to holiday lets. HMRC estimates that up to 1.5 million landlords may be underpaying up to £500 million in tax every year.