The HM Revenue and Customs (HMRC) is cracking down on landlords with undeclared rental property income. A broader initiative to clamp down on landlords not complying with the law.
Received an HMRC Letter for Concealed Rental Income? Here is What You Need to Do Next
Landlords who have failed to report their rental income properly may receive an HMRC letter urging them to review and correct their tax returns.
If you’ve received an HMRC letter for undeclared rental income, you must take appropriate action and understand your options.
How does HMRC Collect Data?
HMRC is collecting data from government-approved deposit schemes. The Connect program employed by HMRC is a powerful tool that allows the tax authority to access data from various third parties to verify the tax compliance of taxpayers.
This program can easily match landlord information with data from individuals who file self-assessment tax returns and report rental property income.
The Connect program can quickly identify individuals who have failed to file self-assessment tax returns. These individuals receive an HMRC letter for undeclared rental income.
An HMRC letter regarding undeclared rental income serves as a reminder for taxpayers to report any sale or disposal of the property. This letter encourages landlords to pay capital gains tax on the profit from such transactions.
HMRC Let Property Campaign
The law requires Landlords to declare their rental income and pay taxes on it. If you do not comply, it will be tax evasion and can result in heavy fines and even criminal charges.
You may receive another type of letter regarding rental income. This letter is to bring your attention to the Let Property Campaign.
“Let Property Campaign” assists landlords who unknowingly failed to pay taxes on rental income earned from a secondary property.
Landlords who want to disclose undeclared income voluntarily can do so through HMRC Let Property Campaign.
Under this campaign, landlords will typically face reduced penalties for coming forward and disclosing all the relevant information and fully cooperating with HMRC.
How Can You Participate in HMRC Let Property Campaign?
We recommend the following steps to participate in the Let Property Campaign and ensure compliance with your property tax obligations:
- Express your intent to HMRC and notify them
- In a 90-day window from the notification date, fully disclose any previously undeclared rental taxes, capital gains taxes, and duty.
- Provide an error-free estimate of the total amount you owe
- Arrange the payment and pay as soon as possible
Alternatively, we are always here to help and manage the process on your behalf. We provide professional assistance to convince HMRC about your situation and taxes.
We offer comprehensive assistance with submitting the necessary notification and disclosure to HMRC, ensuring compliance with all regulations and avoiding penalties. Don’t hesitate to contact us for professional guidance on this matter.
