Landlords get reminder on tidying up tax affairs

HM Revenue & Customs (HMRC) has issued updated guidance for landlords who let out residential property to help them get their tax affairs in order, as part of a campaign that could lead to new tax investigations.

The Let Property Campaign was first launched in September 2013, when HMRC said it estimated that up to 1.5 million residential landlords could be underpaying up to £500 million in UK tax every year.

Under the campaign, landlords who may owe tax, perhaps as a result of misunderstanding the rules, can come forward and tell HMRC about any unpaid tax on rental income, and pay what they owe, including any penalties and interest due, on what HMRC says

The campaign – which HMRC says “offers the best possible terms available” to landlords to get their tax affairs in order” – 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.

HMRC issued updated guidance on the campaign on 9 April, including a reminder that landlords with undisclosed income need to tell HMRC about any unpaid tax now. They will then have three months to calculate and pay what they owe.

The guidance says: “There is no disclosure ‘window’ requiring you to disclose what you owe by a specific date…however, landlords intending to come forward who delay risk higher penalties if they are subject to an enquiry and they have not already notified an intention to disclose.

“Regardless of whether the errors were due to misunderstanding the rules or deliberately avoiding paying the right amount it is better to come to HMRC and admit any inaccuracies rather than wait until HMRC uncovers those errors.”

Any residential landlord or other taxpayer concerned about their own tax affairs, or who believes they may become subject to a tax investigation, would be wise to seek expert advice.

Our specialists at Taxation-Investigation can provide specialist advice to clarify their situation and on the options available to them, so they can make informed decisions about the best way forward. We can also assist in mitigating outcomes or presenting a robust defence where tax affairs are in order. For more information, please contact us.