According to a report in The Guardian, up to half of all Landlords in some areas are not paying tax on their rental income. HMRC is actively seeking out landlords who don’t pay tax and cross referencing the various databases available to them. These include Local Authority licensing schemes and tenancy deposit scheme databases. If you appear on one of these but do not seem to be paying tax on rent, they could be knocking on your door.
When this happens, some landlords will get a nasty shock. Not only will they have to pay tax on rental income for the past 20 years, they may also have to pay a penalty of up to 100% of that tax.
What is The Let Property Campaign?
The Let Property Campaign is an opportunity for landlords who owe tax from letting out residential property to get up to date with their tax affairs.
- It started in Autumn 2013 and was originally intended to last for 18 months.
- At the end of 2018 it is still in effect, but with no indication that this state will last indefinitely.
- The campaign is open to all residential property landlords from those that have multiple properties, to single rentals, and long term lets such as those for students as well as to holiday lettings.
- It does not apply to companies or trusts. It does apply to non-resident landlords.
How can Spectrum help?
Advice from a suitably qualified professional adviser such as Spectrum Accountancy Solutions is strongly recommended. It makes sense to approach HMRC unprompted to minimise any penalties that may be due. If there is an opportunity to claim that there was a reason for not notifying HMRC of any rental income, or that reasonable care was taken when submitting a tax return, then we can explore that. This may help to mitigate any penalties, but that may require care to indicate that conduct was not deliberate, which is where Spectrum Accountancy Solutions come in.
Many people do not know how to deal with HMRC or who to turn to for help resolve the tax dispute. Spectrum can help resolve misunderstandings or errors caused by either HMRC or the taxpayer. The fact is that proper management of HMRC is the best way of reducing the tax, interest and penalty as well as the time taken in resolving any tax dispute. Get in touch to talk about how we can assist you in resolving your rental property tax issues.
Categorised in: Uncategorized
This post was written by Daisy Vowles