Tenant's Toolkit

Let Property Campaign

The Let Property Campaign is designed to help landlords who let residential property in the UK or abroad who have undisclosed income and who owe tax as a result. It provides them with an opportunity to ensure their tax affairs are in order in a simple and often financially advantageous way.

If you have undisclosed income derived from letting a residential property, the first step you must take is to notify HMRC. After you have informed them, you will have 90 days to file a full disclosure showing the address of the properties and tax, interest and penalties due and pay the outstanding sum in full.

A key advantage of the Let Property Campaign is that it enables you to make a full, voluntary disclosure of your liabilities without incurring a severe penalty.

Bear in mind that you will have to pay penalties as a result of making disclosure. However, these are less than those that would occur as a result of a compliance check made by HMRC.

Who can benefit from the Let Property Campaign?

Landlords who are subject to residential property tax will benefit from the Let Property Campaign.

Consider the benefits of the campaign if you are one of the following:

1. A landlord with multiple properties

2. A single-rental landlord

3. A landlord who exclusively rents holiday homes

4. A specialist landlord, for example those who own student or professional rentals

5. A landlords who owns a residential property in the UK but lives abroad, or intends to live abroad for a period of more than 6 months while renting

6. Renting out a single room in your home, provided that your earnings exceed the threshold stipulated by the Rent a Room Scheme

If you are still unsure about whether or not you would benefit from the Let Property Campaign, use the HMRC Let Property Questionnaire in order to clarify.

Do I need to use the Let Property Campaign?

If you have undisclosed income and cannot benefit from any of the other HMRC campaigns, it is advisable to take advantage of this opportunity. The more cooperative you are and the more accurate the information is that you disclose, the more favourably disposed HMRC may be to you.

This is especially true if you have undisclosed taxes simply because you didn’t realise at the time that you had to file a tax return.

In this instance, the most sensible course of action is to admit the mistakes you made rather than waiting until HMRC discovers them – honesty is advised in this situation. Unlike deliberate deception or carelessness, some mistakes regarding tax are not always punished via a penalty.

The law allows HMRC to investigate up to 20 years of historic tax records to uncover undisclosed taxes where behaviour is deliberate. In serious cases, HMRC also has the power to carry out a criminal investigation in order to prevent tax evasion.

In such cases it is best to be represented by an industry expert with the specialist knowledge to advise you on how to proceed.

How do I make a disclosure with the Let Property Campaign?

Once you have decided to use the Let Property Campaign, all you need to do is follow these four simple stages:

1 - Notify HMRC that you wish to take part in the Let Property Campaign

2 - Disclose all the financial information that they are unaware of. This includes:

A - Income

B - Gains

C - Tax

D - Duties

3 - Make a formal offer for the sum total of everything that you owe HMRC

4 - Pay HMRC what you owe them

If you cannot afford to pay the amount of outstanding tax that you owe in one lump sum, you will usually be able to spread your repayments, although this is dependent on your individual circumstances.

Should HMRC ask you for any more information, do your best to provide it. If they ask you for information which – for any reason – you are incapable of giving them, you must provide a full explanation why.

In order to ensure that your filing obligations are completed correctly, you should appoint a suitably qualified and experienced accountant.

The above information has been supplied courtesy of Tuchbands Chartered Accountants & Tax Advisors. For more information, you can visit them here.