1st
May 2015
Reminder - The HMRC says that it is nearing a "High Noon" situation and will give landlords one last chance to put their tax affairs in order. Those who are not declaring their rental income will be facing heavy fines.
The estimated figure that the HMRC says the country is losing from unpaid tax from the rental sector, could be as much as £500 million per year. Their Let Property Campaign is at the moment, allowing an amnesty for landlords to come clean about their rental incomes and declare their unpaid tax. They may face having to pay interest on monies owed.
The HMRC has stated that it will be “working with a variety of bodies over the next few months to develop tools and guidance to support landlords of all types and help them get their affairs up to date.”
The department has a digital intelligence system Connect, that stores information about all the UK's property rentals and those abroad. It will help them to track down those landlords who have not paid their fair share of tax.
As reported earlier in the year, the HMRC announced that they are contacting all the lenders to furnish them with details of rental properties, however it is more than likely that the department will now target letting agent's returns. These will be cross referenced against their landlords that are using their services.
There will tougher penalties for those who do not own up and could even face criminal prosecutions.
An Estate agent's director, Carole Charge, said: “HM Revenue and Customs (HMRC) is currently targeting residential landlords by means of its Let Property Campaign in an attempt to recover the £500 million it believes is being underpaid each year in the sector. It has been writing to letting agents demanding details of rents collected on behalf of landlords for the tax year ended 5 April 2013.
“So if your tax affairs are not up to date and you owe tax on your letting income, you now have the opportunity to make a voluntary disclosure via HMRC’s Let Property Campaign helpline on 03000 514 479. Landlords who do so will have three months to calculate and pay what they owe and will receive the best possible terms. If they do not they could face hefty fines or even criminal prosecution.
"To avoid paying too much tax, landlords need to be aware that certain deductions are allowable when their property is being let or is available for letting. You should consult a qualified accountant or HMRC for specific advice regarding this, however as a general guideline, landlords are permitted to make certain deductions from their rental income before calculating profit.”
Warning:
Richard Merrick of PIMS says, "The HMRC has never been philanthropic, their new online tax tutorials are there for a reason and are extremely informative.
"Anyone who contacts the HMRC must be absolutely sure that they are fully compliant with the tax regulations. If there is an element of doubt, no matter how small, always take advice from an accountant, do not rush in blindly. PIMS Members are eligible to use our Free Tax Help Line
"Once you have all the proper advice, facts and figures then you can be sure to achieve a favourable discussion and outcome with the HMRC."
News Archive »