I don’t need to declare every penny of my rent to the HMRC, do I?
You do and now, you have no choice!
HMRC recently declared their let property campaign (LPC) which aims to nudge landlords into confessing undeclared rental income. They have declared how they will get the information they need. They are fundamentally looking for errant landlords. We now know how those landlords will be found.
HMRC is writing to letting agents in the UK, asking them to provide details of the properties they have let in 2012/13, including the amount collected per property and the addresses of the let property and the landlord. The letting agent is given just 60 days to provide the information, or face a penalty of £300, and further penalties of £60 per day for additional delays. This will include landlords that use agents for tenant find services as well as managed services.
The agent also can’t refuse to provide its customers’ details on the grounds that such personal information is protected by Data Protection Act 1998, as the tax law overrules the Data Protection Act in these circumstances.
What does this mean to Landlords?
Now is the time to ensure all your rental income is declared. Ensure every penny is on your annual tax return regardless of whether you have made a profit or not.
Don’t forget, we can provide you with an annual statement to make doing your return quicker and easier. This will have all your income and all your expenses listed but don’t forget to claim back the interest on any mortgage you have on the property as this of course will NOT be listed and is a legitimate expense (you cannot claim the capital repayment portion of your monthly mortgage payment). You can also claim, agency fees, insurance premiums, services charges (if applicable) and of course maintenance costs.
If you have any queries please do not hesitate to contact us.