Landlords risk missing HMRC ‘let property’ campaign
“An HMRC campaign is considered a ‘window of opportunity’ for those operating in a targeted sector to voluntarily disclose their earnings,” explains Clare Elsby of Elsby & Co accountants and business advisors.
“In return for paying tax on previously under-declared or overstated expenditure, HMRC offers participants reduced penalties. However, once this window closes then HMRC effectively takes the gloves off and embarks upon an intensive compliance follow-up, typically involving investigation and prosecutions.”
Examples of the top five recent revenue-generating campaigns by HMRC, running between 2015 and 2017, include:
Tax Health Plan (doctors and dentists), generating £24.7 million
E-Marketplaces (online traders) - £17.7m
Property Sales (UK and foreign residential disposals) - £14.6m
Offshore New Disclosure Opportunity (UK based individuals and businesses with an offshore account or assets) - £10.8m
VAT Outstanding Returns (the window for VAT-registered businesses to get up-to-date with late VAT returns) - £8m
“Which brings us to HMRC’s current ‘Let Property’ campaign targeting landlords,” continues Clare. “The offer being made is that individual landlords have the opportunity to tell HMRC about any income they haven’t declared by making a voluntary disclosure.
“To get the best possible terms landlords must tell HMRC that they want to take part. After this they have 90 days to calculate and pay what is owed. This applies to any individual landlords who are:
Renting out single or multiple properties
Renting to students or workers
Renting a room in their home for more than the ‘rent-a-room’ threshold, currently £7,500 per year
Living abroad and renting out a property in the UK
Living in the UK and renting out a property abroad
Renting a holiday home, even if the landlord is using it themselves.
“Unlike previous campaigns, there is no disclosure window on the Let Property campaign requiring landlords to disclose what they owe by a specific date. However, those intending to come forward who delay risk higher penalties if they’re subject to an enquiry and have not already notified HMRC of their intention
“To benefit from the reduced penalties offered HMRC will take account of the level to which landlords help them and the accuracy of the information they provide, so there really is every incentive to participate.”
If you are concerned about any of these issues or have perhaps become a ‘reluctant landlord’ after inheriting a property and renting it out, contact Elsby & Co now: http://www.elsbyandco.co.uk