Landlords targeted by HMRC
A new scheme aimed at landlords who may owe tax due to misunderstanding the rules or deliberate evasion was launched last Autumn. 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 do come forward voluntarily as part of the initiative will receive better terms and lower penalties than if approached first 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. According to HMRC, this includes those that have multiple properties and single rentals as well as specialist landlords such as student or workforce rentals and holiday lets. HMRC estimates that up to 1.5 million landlords may be underpaying up to £500 million in tax every year.