HMRC have announced that landlords will be the latest group to be targeted for tax evasion.

The ‘Let Property Campaign‘ is a scheme aimed at landlords who may owe tax due to misunderstanding the rules or deliberate evasion. The intention behind this new scheme, due to commence in December 2013 and run for at least 18 months, is to encourage residential property landlords to make voluntary disclosures to HMRC concerning any undeclared rental income.

Although applicable to all residential landlords, HMRC intend to focus particularly on those landlords who let to students/groups of workers, landlords who let holiday accommodation and landlords who let properties for multiple occupancy. HMRC estimates that up to 1.5 million landlords may be underpaying up to £500 million in tax every year.

As with all campaigns launched by HMRC, one would expect a clear timetable of action, plus a wealth of information on the HMRC website, however this is not available at the time of writing. Disclosures are therefore currently being handled manually.

Let Property Campaign: Procedure

And landlord wishing to make a voluntary disclosure should take note of the following procedure:

  • Make initial contact with the Let Property Campaign team on 03000 514479 (Mon-Fri 9am-5pm)
  • The HMRC Officer will request basic information such as name, address, National Insurance or Unique Taxpayer Reference (UTR), date of birth and contact telephone number
  • HMRC will then set up a disclosure record and allocate a reference number (usually two numbers followed by eight letters)
  • A blank disclosure form will then be issued by post giving a three month completion deadline.

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.

We are happy to advise any current or prospective landlord on this, or indeed any, area of compliance.

 

For information of users: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.