For HM Revenue and Customs (HMRC) undeclared rental income has always been one of the easier fields of tax-evasion to investigate.

As they have access to the ownership details recorded at the Land Registry, they are able to identify when an individual owns more than one property. By matching address information, they can also spot those who own a single property, but do not live there. Based on this information, they then issue letters to the landlord concerned, stating that they believe they have failed to declare rental income properly. Such letters have been sent out regularly for some years now. They have also recently started sending statutory notices to letting agents asking for details of rentals received on their clients’ behalf. These notices have legal force, with penalties for agents that fail to comply.

The slowing down of the property market has resulted in this area becoming larger in recent years. When moving, whether for a job relocation or a growing family, many have found themselves unable to sell their old property. With ongoing costs, many in this situation choose to rent as an obvious means to defray those expenses. Having not planned to become a landlord, many in this situation are ill-prepared for the role. Some think that, as it was not intentional, they do not have to declare anything. Others think that receiving rents closely matching mortgage payments exempts them from declaration, which is not the case. Sadly, whilst potentially reducing the level of penalties arising, ignorance of the legal position does not leave such unfortunates free and clear.

However, there is a way to sort matters out whilst minimising the penalties that are due. The Let Property Campaign is one of HMRC’s longest running disclosure campaigns. Disclosure campaigns offer a reduced level of penalties for any taxpayers who voluntarily provide the information necessary to bring their tax affairs up to date. The first thing that you need to do is notify HMRC that you intend to make a disclosure. It is best to do this as soon as possible, as the opportunity will be lost if HMRC are able to identify the failure first. You then have 90 days to compile the necessary information and submit it to HMRC along with payment.

This Campaign is open to all UK landlords renting residential property. This includes UK residents who rent out property abroad, or non-residents with UK property rentals. It also covers more specialised areas of property rental, such as student letting or holiday accommodation. Commercial property rental is not covered by this campaign.

Details of the Let Property Campaign can be found here (tinyurl.com/y9xqnm4n), with the online disclosure forms available here (tinyurl.com/gqs3yr6). The taxpayer does not have to make the disclosure themself, but can engage an agent to do so on their behalf. This will usually be advisable, as they will be able to tell you what you are allowed to claim and so help minimise any liabilities arising.

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https://www.hastingsindependentpress.co.uk/wp-content/uploads/2017/05/business.jpghttps://www.hastingsindependentpress.co.uk/wp-content/uploads/2017/05/business.jpgHIPBusinessHMRC,income,Land Registry,rentalFor HM Revenue and Customs (HMRC) undeclared rental income has always been one of the easier fields of tax-evasion to investigate. As they have access to the ownership details recorded at the Land Registry, they are able to identify when an individual owns more than one property. By matching...The Hastings & St Leonards non-profit community newspaper