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FREE landlord softwareThe HMRC Let Property Campaign has raised £7.9 million in additional tax since its launch back in Autumn 2013.
The Government's scheme was launched as part of initiative to recover undeclared, or under-declared rental income by offering landlords the opportunity to take up more favourable terms on any voluntary disclosures.
Promoted Disclosure
40,000 landlords were sent a letter from the Let Property Scheme offering ‘promoted disclosure’ within a thirty day time window in which to make contact and regularise their tax affairs. The letters also made it clear that the same favourable conditions would not be available beyond the thirty day window.
Landlords who ignored or failed to respond to the HMRC offer would then risk more substantial penalties on any paid taxes, of up to 100% of the unpaid liabilities (or up to 200% for offshore related income), investigation under Code of Practice 8/9 and in certain cases criminal prosecutions.
Penalties
The rate of penalties varies depending on the landlords individual circumstances and whether they made an 'unprompted' or a 'prompted' disclosure. Interest will be charged from the date the tax is due till the date it is actually paid.
Sources of Information
HMRC has recently started gathering information from a wider range of sources beyond Local Authorities, the Land Registry and the Electoral Roll.
In late 2014, hundreds of estate agents were sent statutory notices to provide details of rents collected on behalf of all landlords.
Ian Leigh, Property Tax Specialist at Accountancy Firm Jeffreys Henry LLP, commented:
“With increased data gathering actives, it’s less likely a case of if but more likely when HMRC catches up with you. Landlords with undeclared or under disclosed rental income who have not yet been contacted by HMRC and want to regularise their affairs should take this opportunity as soon as possible. Very favourable terms and affordable repayment plans can often be negotiated.”
HMRC estimates that up to 1.5 million landlords may be underpaying £500m in tax every year.
According to the official website, HMRC has so far collected £7,852,753 under the Let Property Campaign as at as at 30 Oct 2014.
Common Misconceptions
Many buy-to-let and accidental landlords have under declared rental profits having misunderstood the rules. The most common misconception is that landlords believe all of the mortgage repayments can be offset however it’s only the interest proportion.
Take advantage of our discounted landlord insurance rates
Penalties
The rate of penalties varies depending on the landlords individual circumstances and whether they made an 'unprompted' or a 'prompted' disclosure. Interest will be charged from the date the tax is due till the date it is actually paid.
Sources of Information
HMRC has recently started gathering information from a wider range of sources beyond Local Authorities, the Land Registry and the Electoral Roll.
In late 2014, hundreds of estate agents were sent statutory notices to provide details of rents collected on behalf of all landlords.
Ian Leigh, Property Tax Specialist at Accountancy Firm Jeffreys Henry LLP, commented:
“With increased data gathering actives, it’s less likely a case of if but more likely when HMRC catches up with you. Landlords with undeclared or under disclosed rental income who have not yet been contacted by HMRC and want to regularise their affairs should take this opportunity as soon as possible. Very favourable terms and affordable repayment plans can often be negotiated.”
HMRC estimates that up to 1.5 million landlords may be underpaying £500m in tax every year.
According to the official website, HMRC has so far collected £7,852,753 under the Let Property Campaign as at as at 30 Oct 2014.
Common Misconceptions
Many buy-to-let and accidental landlords have under declared rental profits having misunderstood the rules. The most common misconception is that landlords believe all of the mortgage repayments can be offset however it’s only the interest proportion.
Take advantage of our discounted landlord insurance rates
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