Let property HMRC disclosure

Let property HMRC disclosure

In 2013, HMRC launched its ‘Let Property’ campaign as a move to ‘encourage’ landlords to come forward and tell them about previously undeclared rental income. We didn’t expect that it would still be running and it is understood that in 2018/19 HMRC has stepped up the campaign and has sent ‘prompting’ letters to thousands of property owners who it suspects are avoiding tax. These letters may not be accurately targeted because of the blanket approach HMRC are believed to be taking.

Tracking

We know that HMRC developed a social network analysis software data mining system, which allows them to gather data from a number of different sources. This includes Land Registry from where they can track sales of property for capital gains tax purposes. With the new 30-day reporting deadline for sale of UK property, the need to be aware of the tax implication of owning investment property is ever more important.

Penalties

HMRC have powers to go back up to 20 years where they establish a failure to declare, on top of which they will charge interest and penalties. The ‘advantage’ of using the formality of the Let Property campaign is that the penalties will not be as high as if HMRC find out about your income and invite you to make a disclosure before you approach them. If you think, any of this article may apply to you and you would like assistance dealing with HMRC, please get in touch.