Disclosure opportunity for landlords
Landlords that may owe tax, whether through misunderstanding 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 have 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, including those that have multiple properties and single rentals as well as 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.
HMRC has also launched an online training portal as part of the disclosure opportunity.
There are a number of tutorials that cover topics including:
- when and how property letting starts, and what to do
- the various types of property income – furnished, unfurnished, holiday lets, Rent-a-Room, the Non Resident landlord Scheme – and how they are taxed
- the correct treatment of income and expenditure, both revenue and capital
- tips on record-keeping
- property disposal, Capital Gains and Inheritance Tax
- tax return filing and paying dates.