Let property disclosure campaign
HMRC’s Let Property Campaign provides landlords who have undeclared income from residential property lettings in the UK or abroad with an opportunity to regularise their affairs by disclosing any outstanding liabilities whether due to misunderstanding the tax rules or because of deliberate tax evasion.
HMRC has recently updated their online guidance Let Property Campaign, providing examples of the tax errors that landlords make and listing several examples. These examples look at scenarios involving couples moving in together, inheriting a property, divorce and moving to a care home. In all these examples, rental profits need to be declared to HMRC.
The campaign was launched in September 2013 and does not currently have an end date. Landlords who do not avail of the opportunity and are targeted by HMRC can face penalties of up to 100% of the tax due together with possible criminal prosecution.
Taxpayers that come forward will benefit from better terms and lower penalties for making a disclosure. Landlords that make an accurate voluntary disclosure are likely to face a maximum penalty of 0%, 10% or 20% depending on the circumstance on top of the tax and interest due. There are higher penalties for offshore liabilities.
There are three main stages to taking part in the campaign:
- Notifying HMRC that you wish to take part,
- Preparing an actual disclosure, and
- Making a formal offer together with payment.
The campaign is open to all individual landlords renting out residential property, including landlords with multiple or single rentals as well as specialist landlords with student or workforce rentals. Landlords who feel that they should consider this option would be advised to take professional advice. We can help.
HMRC’s Let Property Campaign targets landlords who have undeclared income from residential property lettings. The campaign offers the opportunity for landlords to come clean about any outstanding liabilities because of misunderstanding the rules or due to deliberate evasion. HMRC has estimatedthat they are losing at least £550m a year in underpaid taxes. The campaign does not currently have a closing date and 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. Landlords that come forward under the terms of the campaign and make an accurate voluntary disclosure are likely to face a maximum penalty of 0%, 10% or 20% depending on the circumstance, these charges will be on top of the tax and interest due. HMRC is unlikely to accept a disclosure under the terms of the campaign where they have already opened an enquiry or compliance check. 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 individual landlords renting out residential property. That includes landlords with multiple properties and single rentals as well as specialist landlords with student or workforce rentals. There are three main stages to taking part in the campaign, notifying HMRC that you wish to take part, preparing an actual disclosure and making a formal offer together with payment.