A Landlord's Tax Opportunity: The  Let Property Campaign

H M Revenue & Customs’ (HMRC) Let Property Campaign (LPC) is an opportunity for landlords to benefit from lower penalties by making a voluntary disclosure of previously undeclared income from residential property lettings.

The campaign represents a generous offer from HMRC to Landlords, offering:

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• Minimal penalties to most using the scheme

• Treats the disclosure as voluntary avoiding the risk of criminal proceedings

• Affords landlords the opportunity to correct their historic tax affairs and start afresh

Why make a disclosure under the LPC?

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• Disclosure under the LPC is treated as a voluntary disclosure, thus you will benefit from lower penalties

• You (or your accountant) compute the tax due and make an offer to HMRC

• HMRC probably already know about the property income – Tell them before they come knocking!

 

What’s Behind the Campaign?

After a successful pilot campaign the tax man has identified property income as a significant source of lost revenue.  There are many reasons for this not least many taxpayers becoming accidental landlords, perhaps letting property that they were unable to sell.  Many in these circumstances didn’t realise that they should have advised HMRC of the property letting – even if it doesn’t make a profit.

Others have ‘meant to get around to it’ but the years have passed and they now fear the tax liabilities that they may owe.

Over recent years HMRC have developed a powerful computer system which makes it very easy for them, to identify undeclared income via access to sites including:

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• The Land Registry

• Voters Roll

• Landlords Deposit Scheme Records

 In addition they have and are invoking the powers to demand information from banks and letting agents regarding the landlords and their property portfolios.

What if I ignore the Campaign?

If you have property income to declare and don’t make a disclosure you will not benefit from the lower penalties or be treated as a voluntary disclosure.  Penalties will be higher and, potentially, in the most serious cases there is the risk of criminal proceedings.  Once HMRC issue an enquiry letter to you they are unlikely to accept that you planned to make a voluntary declaration.

Protect Yourself – Take Action Today

There are essentially 3 stages, all of which we can assist with:

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1. Notify HMRC that you intend to make a disclosure. Unless you have already received notification of a tax enquiry, you will be treated as a making a voluntary disclosure

2. Compute the profits from property lettings and the tax due (including any interest and penalties)

3. Make an offer of the tax due to HMRC within 3 Months of receiving their acknowledgement to your notification (see Point 1 above) and pay the tax due.

Rest assured that Hurn Accountants will treat you in a courteous and non-judgemental manner. We will use our vast experience in the taxation of property income to ensure that we obtain the best possible tax settlement for you, allowing you to put this all behind you.  We’re here to help – call us and we can start work on giving you closure on your property tax affairs.