News In Focus
HMRC campaign targets undeclared rental income
Landlords of residential property who have not told HM Revenue & Customs about all their rental income, have a window of opportunity to put matters right, or risk being penailsed under a new HMRC campaign.
Over the next 18 months, and perhaps for longer, HMRC will target the landlords, estimated at up to 1.5m in number, who between them may be underpaying £500m in UK tax every year.
Under HMRC’s Let Property Campaign, landlords who may owe tax – whether through misunderstanding the rules or deliberate evasion – can come forward and tell HMRC about any unpaid tax on rents, and pay what they owe, including any penalties and interest due. Any penalty levied will be lower than if they are detected first – penalties can be up to 100% of the tax due and a possible criminal prosecution.
In a departure from previous campaigns, the opportunity to come forward voluntarily will remain open throughout the campaign period.
The campaign applies to all residential property landlords, whether operating a single rental or multiple properties, from student or workforce rentals to holiday lettings. HMRC will use information it holds about property rental in the UK and abroad, along with information already held on HMRC‘s digital intelligence system Connect, to identify people who have not paid what they owe.
Marian Wilson, head of HMRC Campaigns, said: “All rent from letting out a residential property or holiday home has to be declared for income tax purposes. Telling us is simple and straightforward.
“We appreciate some people will have made honest mistakes, and some may not be fully aware that the rent from a property is taxable, and that is why it always makes sense to talk to us so we can help. It is always cheaper to come forward voluntarily and pay the tax you owe, rather than wait for HMRC to come calling."
Click here for information on HMRC campaigns.