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Landlords urged to pay undeclared tax ‘sooner rather than later’

HMRC’s Let Property Campaign was launched in 2013, with the objective to encourage landlords to come forward and report undeclared rental income and expenditure.

The number of landlords who were estimated to have either underpaid or failed to pay their tax is estimated to be at 1.5 million between 2009 and 2010, equating to £500 million in unpaid taxes.

The initiative originally targeted landlords with multiple properties, specialist landlords who rent to students, people with holiday lets and those who let houses in multiple occupation but has extended to target all landlords.

However, despite best efforts, according to top 20 accountancy firm, Saffery Champness, new data shows that in the five years since the campaign started, only 35,099 people have made voluntary disclosures to HMRC, which is only 2.3% of the individuals originally identified, and that the 17.1%, or £85m, of that amount overall.

According to HMRC’s estimates we can see that there are a large quantity of landlords who have additional tax to pay, but are yet to come forward. 

“From the outset, the Let Property Campaign was always looking much more widely than just traditional landlords,” said James Hender, head of private wealth at Saffery Champness. “It also targets those who may have become accidental landlords—such as those with holiday lets or multiple occupations.”

 

 

2013-2014

2014-2015

2015-2016

2016-2017

2017-2018

Disclosures

886

9,486

10,040

8,080

6,607

Taxpayer offers

 

762

8,387

9,038

7,262

6,032

Yield Recorded

£0

£17,633,534

£25,207,873

 

£21,392,426

£21,198,613


He continues, “the tax system is becoming more complex and the burden is shifting further towards the taxpayer: this inevitably means individual mistakes and misunderstanding can happen. Looking at the data from the FOI, of the large number of tax payers who stated that they had either failed to notify HMRC of their original liabilities or hadn’t taken reasonable care, many would likely have been unaware that they owed anything at all.

The campaign is not open to landlords who are letting out non-residentials properties such as shops, garages and lock ups.

HMRC state that “The Let Property Campaign is an opportunity for landlords who owe tax through letting out residential property, in the UK or abroad, to get up to date with their tax affairs in a simple way and take advantage of the best possible terms”.

If you’re a landlord and you have undisclosed income, you must tell HMRC about any unpaid tax now. You’ll then have 90 days to work out and pay what you owe. To benefit from the reduced penalties offered, HMRC will take account of the level to which you’ve helped them and the accuracy of the information you provided.

There is a guide available on the official HMRC which explains how you can do that, please find it here https://www.gov.uk/government/publications/let-property-campaign-your-guide-to-making-a-disclosure/let-property-campaign-your-guide-to-making-a-disclosure

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