Perhaps you couldn’t sell your home during the financial crisis and decided to let it out instead. Alternatively, you may have a sizable property portfolio. Either way, if you’re a landlord it’s important to make sure that any rent received is properly declared.
HMRC has started to target this area as they believe a significant number of landlords do not report their property income. HMRC has recently been sending letters out to people who they think are not disclosing the rental income they’re receiving. These can be quite frightening saying “HMRC is aware you are a landlord who is letting property and that you may be liable to tax on that income”.
Worryingly, many people who’ve had these letters are either not a landlord at all, or are already declaring the income on a tax return!
HMRC is currently operating The Let Property Campaign to encourage you to declare your full income. By doing this now, you may benefit from significantly reduced penalties and also avoid prosecution. But if you do nothing, a penalty of up to 100% of the unpaid tax may be charged.
If you’re unsure about what you need to declare and would like some advice, please feel free to contact our tax director, Michael Burgess on 01782 279615. He has the benefit of joint qualification as both a Chartered Accountant and Chartered Tax Advisor so is ideally placed to help answer your queries. You can also see an overview of our self-assessment services here.