HMRC are offering landlords who rent out residential property and fail to tell HMRC about all the rental income an opportunity to come forward voluntarily in the hope of recouping an estimated £500m it estimates is lost in tax from this sector, reports accountancy services Harris & Co.
The Let Property Campaign, which will run for at least 18 months, is aimed at residential property landlords – from those that have multiple properties, to single rentals, and from specialist landlords such as student or workforce rentals, to holiday lettings – who may owe tax, whether through misunderstanding the rules or deliberate evasion.
Landlords are invited to inform HMRC of unpaid tax on rents, and pay what they owe, including any penalties and interest due. Penalties will be lower than if HMRC comes to them first.
In a departure from previous campaigns, the opportunity to come forward voluntarily will remain open throughout the period of the campaign to ensure as many people as possible come forward.
HMRC estimates that up to 1.5 million landlords may be underpaying up to £500m in UK tax every year.
After the campaign, HMRC will use information they hold about property rental in the UK and abroad, along with information already held on their digital intelligence system Connect, to identify those who have not paid what they owe. Those that fail to come forward will face higher penalties or even criminal prosecution.
Marian Wilson, head of HMRC Campaigns, said that the department appreciates that some ‘honest’ mistakes might have been made.‘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.
Telling HMRC about your tax liabilities is simple and straightforward, and help, advice and support are available. The message for all landlords owing tax is simple – it is better to come to us before we come to you,’ said Wilson.