Landlords who let residential property, and fail to tell HM Revenue & Customs (HMRC) about all their rental income, are being offered the opportunity to voluntarily put their tax affairs in order.
HMRC estimates that up to 1.5 million such landlords may be underpaying up to £500 million in UK tax every year.
Now it has launched the Let Property Campaign, under which 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.
The campaign, launched on 19 September, is open to all residential property landlords, including those who lease out a single property, a large property portfolio, student or workforce rentals and holiday homes.
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.
“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.”
HMRC will use information it holds about property rental in the UK and abroad, along with information already held on its digital intelligence system Connect, to identify people who have not paid what they owe. For those that fail to come forward, higher penalties – or even criminal prosecution – could follow.
If you are unsure of your tax obligations to HMRC, then Milsted Langdon can help. Our tax team can advise you on your tax liability and ensure that your affairs are in order. To find out more, please contact us.