Let Property Campaign Ongoing
Unlike most voluntary disclosure campaigns from HMRC, which normally run for a short period of time, the Let Property campaign is still ongoing. It was first introduced in late 2013, as an opportunity to voluntarily disclose rental income, and reduce the penalties arising. At the time it was only envisaged to last for 18 months. However, this offer has not yet been rescinded, with the tax advantages from the scheme still being available to this day.
Part of the reason for this continuation is that becoming a taxable landlord is an easy position to fall into be accident. Many property owners, struggling to sell in a depressed market, have resorted to renting as a temporary measure. As the property market does not show any show signs of recovery, the number of these ‘accidental’ landlords will continue to rise. It is therefore welcome that HMRC appear to have recognised this phenomenon, leaving this campaign open so those who have made an innocent mistake can rectify their error relatively cheaply.
As HMRC has access to the records at the Land Registry, and thus can identify who owns individual properties, they continue to issue letters to landlords they believe have undeclared rental income. Those who are receiving such income, but who ignore the opportunity to come clean under the Let Property Campaign, will find themselves facing much higher penalties. Failing to take advantage of the Let Property Campaign is likely to be considered deliberate tax avoidance, which can attract penalties of up to 100% of the tax due on top of the liability itself. Disclosure under the campaign will, at most, attract penalties under the much more generous voluntary disclosure provisions.
Who is eligible to make a disclosure under the Let Property Campaign?The following are eligible for making disclosure under the Let Property Campaign.
• Landlords with single or multiple property rentals
• Specialist landlords with student or workforce rentals
• Holiday lettings. These will be subject to tax, even if you personally use the property as a holiday home for part of the year.
• Renting out a room in your main home for more than the Rent a Room Scheme threshold. The Rent a Room Scheme threshold is the amount you can receive for renting out a room in your home tax-free. The threshold is currently £7,500 a year (£3,750 each if jointly owned with a spouse).
• Those who actually live abroad, or who intend to live abroad, for a period of more than 6 months and who rent out a property in the UK during this time.
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