06 Nov DECLARING YOUR RENTAL INCOME
LANDLORDS ARE YOU DOING IT RIGHT??
Any income from letting out a residential property has to be declared for income tax purposes, telling the HMRC is very simple and straight forward and we urge any residential landlord to do this. It has come to our attention that HMRC are launching a campaign targeting any Residential Landlords who may not have declared all their rental income, but fear not! To assist you, Tax and Accountancy Specialists at Bulpitt Crocker Taxation Ltd are drawing attention to this campaign and protecting clients from being caught out and offering ample advice as to how to do it properly.
A chance to declare tax on your rental income
Landlords that rent out residential property and have failed to inform HMRC about their rental income are being given the chance to ‘come forward and put their tax affairs straight’. The new ‘Let Property Campaign’ is giving landlords the chance to declare any unpaid tax on rents – whether through misunderstanding the rules or deliberate evasion- and pay the sum owed including any interest and penalties due.
Penalties for not declaring rental income
Not declaring your rental income is referred to by the HMRC as a “failure to notify” in these circumstances you may be charged penalty fees. These can be avoided or reduced when the omission is declared to HMRC before they discover it. They refer to this as an “unprompted disclosure”. The minimum penalty for an unprompted disclosure is lower than the minimum penalty for a prompted one. The HMRC provide more information about disclosures and penalties here.
Marian Wilson (Head of HMRC Campaigns) says, ‘we appreciate some people will have made honest mistakes’ (be that through misunderstanding or deliberate evasion), ‘and that is why it always makes sense to talk to us so we can help.’ The campaign is working with various bodies to develop tools and guidance to support landlords and helping them update their tax affairs, it is always cheaper to come forward voluntarily than it is to wait for HMRC to come knocking!
This campaign will be running for at least 18 months and the opportunity to come forward voluntarily will remain open throughout. Failure to do so within the allotted time could mean a visit from HMRC and the opportunity offered as part of the campaign will no longer be available. Any penalty given by coming forward will be significantly lower than if HMRC come to you first. So, to avoid higher penalties or even criminal prosecution, the message to our landlords and all landlords is very simple…
‘It is better to go to them before they come to you!!’
For more information on this topic please contact Gordon Barker Residential Lettings on 01202 292400 or [email protected]. Information on this topic has been supplied by Bulpitt Crocker Taxation Ltd on 01202 586777 or [email protected]