The ‘Let Property Campaign’, is a Government initiative that was launched in 2013 with the aim of giving landlords the opportunity to get their taxes up to date through voluntary disclosure.
As the campaign launched, it was estimated that 1 in 3 landlords were not declaring rental income.
Find out more about the Let Property Campaign and how it affects you as a landlord.
Who Can Take Part in the Let Property Campaign?
The Let Property Campaign is aimed at individuals that rent out residential properties. This includes those who are:
- Renting out a single property.
- Renting out multiple properties.
- A specialist landlord, dealing with rentals in markets such as students or the workforce.
- Renting out a room in your own home.
- Living abroad and renting out a property in the UK.
- Living in the UK and renting a property abroad.
- Renting out a holiday home even if you use it yourself.
The scheme is not available to companies, trusts or those renting out commercial properties.
How Do I Make My Voluntary Disclosure?
In order to make your voluntary disclosure, you first need to make HMRC aware of your intention to make a disclosure, this is done by completing a Digital Disclosure Service (DDS) form; a professional such as an accountant can also do this on your behalf.
Following this notification, you will receive a letter containing your unique Disclosure Reference Number (DRN), you will then have 90 days to calculate tax owed and settle it with HMRC.
As part of the disclosure, you’ll be required to tell HMRC about all income sources, undisclosed rental income and any tax or duties you’ve not previously disclosed to them.
Following this, you’ll need to make them a formal offer – we highly recommend using an accountant for this process as it can be very complex and accurate information could result in a lower bill.
On acceptance of your offer, you’ll be required to pay what you owe. For help with HMRC’s Let Property Campaign, you can call them directly on 0300 123 0998.
Will I Be Fined If I Report Previously Undisclosed Taxes?
No, there is no additional penalty involved when making voluntary disclosure, in fact, the scheme will allow you to get the best possible terms to pay the tax you owe. However, failing to make a voluntary disclosure now and being caught at a later date will result in higher penalties and even legal action.
I’ve Received a Letter from HMRC – What Do I Do?
HMRC have all the information on landlords and owners of buy-to-let properties, generally this information is sourced from letting agents and land registries. If you have received a letter from HMRC, it means that they have identified you as a landlord who they consider may not have declared all of their rental income.
If you receive a letter and know you have undeclared income, you should contact HMRC immediately to start the process of making your voluntary disclosure. If you are unsure, contact an accountant to assess your accounting records.
Expert Tax Advice from First Call Financials
Whether you are a landlord, company or individual; paying the right tax and keeping accurate accounting records is essential. Failing to do so can result in heavy fines and time-consuming inspections.
At First Call, we work with a wide range of clients to ensure that they are complaint. For more information on our services, or getting the best out of the Let Property Campaign, why not give one of our expert team a call on 0117 3790810.
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This post was written by Steph Roffey