HMRC Task Force Is Coming For Landlords With Undeclared Rental Income

The Government is currently investing millions of pounds into a specialist task force who are on the hunt for Landlords up and down the country that have not been declaring their rental income. Benjamin Brain, Director at Hannells, explains the Property Let Campaign – a scheme which gives guilty Landlords the opportunity to ‘fess up and receive a softer penalty…

If you’ve been receiving rent for a property and haven’t been declaring it to HMRC, time could be running out before this a crack team of property investigators discover you and hit you with a bill for the tax you’ve not paid, plus interest.

HMRC reckons there’s around 700,000 Landlords (about a third!) in the UK that fall into this category and with the average yearly income per property sitting at around £19,000 – that’s £13.5 BILLION worth of taxable income that the Government is missing out on, and they’re doing something about it.

If this includes you, the Let Property Campaign has been created to give Landlords the opportunity to declare their previously unreported income and be treated more leniently when it comes to dishing out the penalties.

The scheme actually started way back in 2013 when HRMC started to send out letters to Landlords it suspected had fallen foul of declaring their rental income.

The latest iteration has seen a fresh batch of letters being sent out with many Landlords who had thought they were getting away with it being caught red handed and forced to pay up.

Any Landlords that decide that it’s no longer worth taking the risk and wish to take advantage of this property tax amnesty(ish) campaign will have to notify HMRC that they intend to take part in the Let Property Campaign.

At this stage, you won’t be expected to pay back everything you owe in full.

You’ll have 90 days to calculate and pay the amount owed.

By proactively notifying HRMC instead of waiting for them to catch you out you’ll, in the words of HRMC, receive a reduced penalty.

By choosing NOT to declare your income, you could be in for a rough time.

HMRC will charge higher penalties for those who have chosen not to take part in the campaign and that can be up to 100% of the unpaid tax, plus interest.

With current law allowing them to go back a whole twenty years, and even launch a criminal investigation, this could be a significant amount of money if you’ve been renting properties for a number of years without declaring.

They’re not going to be easily convinced that it was a “mistake” either.

It would appear that there’s three levels of “harshness” with regards to the penalties.

You’ll receive the softest treatment by using the Let Property Campaign to declare what you owe without waiting to be notified by HMRC.

Penalties are stepped up if you receive a letter prompting you from HMRC and you comply with the actions and the specified timeframes stated in the letter.

Landlords who ignore all of the above and continue to receive undeclared income will receive the harshest penalties.

The important message here is that if you are receiving rental undeclared rental income and you haven’t yet been caught, you’re not in the safe zone.

Despite similar schemes having been in place since 2013, the HMRC has been increasing their snooping powers alongside investing millions into some seriously sophisticated technology that will track down tax dodging Landlords.

There is currently no expiry date on this disclosure “window” and it looks like it’s going to be around for some time to come but don’t use that as an excuse to delay.

The longer you wait, the harsher the punishment.

If you’ve been receiving rental income and not declaring it to the tax man it is no longer a case of “if” you get caught, but “when”.

Now might be the ideal time to come clean so you can take advantage of the more lenient terms of the Let Property Campaign.

Waiting for them to sniff you out, and they are serious about this, could be a very expensive risk.

If you do receive a letter and you’re not sure what to do, you should always seek professional advice from a property tax specialist – of which I am most definitely not.

For the full details on the Let Property Campaign, check out the link to the official HMRC webpage below:

HRMC Let Property Campaign Official Page

Thanks for reading, I hope that you’ve found it useful and if you are one of the Landlords included in the third that don’t declare income, don’t get caught short.

Good luck to all the investors out there and I’ll be back soon with more useful property investment information.

All the best.

Benjamin Brain



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