HMRC issues warning over undeclared lettings income
HMRC’s latest campaign is targeting landlords who have failed to declare their rental earnings from previous years or who have filed inaccurate tax returns. HMRC estimates that one million buy-to-let and other private landlords are not declaring their rental income, cheating the public coffers of at least £550m a year.
The campaign is known as the Let Property Campaign and follows last year’s campaign aimed at landlords who had sold a rental property but did not declare the profit for capital gains tax.
HMRC are warning those who have failed to declare their rental earnings to pay up or face higher penalties and landlords with unpaid tax who ignore the campaign’s “disclosure opportunity” are “playing a high risk game”. Officials are obtaining data from letting agents, local authorities and elsewhere to track down those who don’t come forward.
HMRC believes that most of those failing to declare rental earnings owe only a few hundreds of pounds of tax a year. Many are thought to be small-scale, amateur landlords renting out a property as a retirement nest egg, or “accidental” landlords letting out a former home they have been unwilling or unable to sell. HMRC accepts that “not every landlord who owes tax is deliberately trying to cheat the system”, and points out that in some cases those making a disclosure would not be charged a penalty. The campaign is “not about penalising genuine mistakes”, said an HMRC spokesman.
Opportunities exist to put matters right, to minimise liabilities and avoid prosecution. If you have undeclared lettings income it is important to obtain specialist advice to ensure the best result. Call inTAX for a free consultation on 020 3675 8122, or email Jacqui.firstname.lastname@example.org