HMRC TAX MAN COMETHSource: http://news.rla.org.uk/hmrc-tax-man-cometh/
As many landlords know, HMRC launched their Let Property Campaign in Autumn 2013, which is the Government’s rental income declaration amnesty. The carrot is no stick, and the stick is now bigger than ever.
In its basic form, the campaign is telling landlords to come forward before HMRC come to them, the benefit being less stringent fines and reduced risk of criminal investigation. Waiting until the tax man comes to you is going to cost a lot more than it would if you made the first step.
We have been made aware of a letter sent by HMRC to an RLA member, which you can view here. The letter quite clearly states that HMRC are aware that this person is a landlord and that they now have just 30 days in which to get in touch before further, stronger, action is taken.
The letter also suggests that responding to it would class your declaration as “Prompted” and suggesting that this “may affect the penalty you will have to pay”.
It’s clear that the best way in which landlords can potentially reduce penalty levels is to declare rental income before they receive a letter like this. RITA4RENT, the RLA’s official tax partner, have dealt with countless Let Property Campaign cases and in a number of instances, been able to minimise landlords’ exposure before they go ahead and declare to HMRC.
A case study is available to download here. The case study, covers an accidental landlord who had been receiving over £800 per month in rent since 2006 and who had not made a single tax return since. RITA4RENT was able to prepare the tax calculations before submitting a return to HMRC, under the Let Property Campaign, with a tax liability of £22 and a £4 penalty.
Whilst this may not be the case for every landlord, it also shows that it pays to discuss your situation with someone like RITA4RENT before approaching HMRC.