Think you might owe some tax? Come clean now

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It’s not an amnesty, but HMRC is running a campaign encouraging landlords to sort out their tax affairs. Known as the Let Property Campaign, it’s aimed at those who might not be up to speed with the tax laws or who have made honest mistakes and are worrying about the situation. It offers any private individuals letting domestic properties an opportunity to make a voluntary disclosure and get the best possible terms to pay the tax they owe.

A helping hand for the smaller scale landlord

The scheme isn’t an option for companies, trusts or for anyone renting out commercial premises. HMRC are targeting those private landlords who may be new to the sector, including accidental landlords, those renting out holiday homes, first-time buy-to-let investors and people taking in lodgers. It doesn’t matter if it’s a single property or one of a number, if it’s in the UK or overseas. Tax rules can be complicated, and it’s easy to run up liabilities quickly. If you’re not used to seeing property as a business, you could easily drift into difficult waters.

It’s always better to engage with HMRC to sort what’s owing. They take a dim view of any attempts to evade payment but are generally very helpful when you’re open and upfront with them. A questionnaire will help you decide if you need to make a voluntary disclosure, and there’s even a dedicated helpline  for the scheme.

90 days’ grace

Once you’ve made a voluntary disclosure, you’ll have 90 days to calculate the tax you owe and pay it over. Most individuals don’t owe that much, and although 13,000 landlords have used the scheme, the total revenue is only around £5m. That averages at less than £400. Of course, every case will be different, but the amounts aren’t huge when compared to the worry and the possible penalties you could incur if HMRC believes you’ve been trying to hide rental income.

Find out more, but act quickly

There’s no official end date for the scheme, but while it’s running, there’s a task force looking out for those with undeclared property rental income. It makes sense to check out your situation now and do what you can to get everything straight.

To learn more about landlord’s responsibilities, talk to our team, follow our blog and sign up for updates.