Landlords that owe tax scrutinised by HMRC
HRMC have announced that landlords will be the latest group to be targeted for tax evasion.
The scheme is aimed at landlords who may owe tax due to misunderstanding the rules or deliberate evasion. The new campaign was launched on 19 September 2013 and according to HMRC will run for at least 18 months. In a change of tactic, HMRC will allow landlords to come forward voluntarily throughout the entire time period that the disclosure opportunity remains open.
The campaign is open to all residential property landlords including those that have multiple properties, single rentals, and specialist landlords (such as those involved in 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.
HMRC have confirmed that landlords who come forward voluntarily as part of the initiative will receive better terms and lower penalties. From next year, 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. Taxpayers found to be evading tax may face penalties of up to 100% of the tax due together with possible criminal prosecution.