HMRC have announced that they are to launch a campaign targeting landlords who they consider to be failing to pay the tax due on rents they receive on their properties. HMRC estimates that up to 1.5 million landlords may have underpaid or failed to pay up to £500 million in tax in 2009 to 2010.
The campaign will target all landlords, but will be focusing compliance activity into specific landlord ‘types’, for example, those who own more than one property, specialist landlords who rent to students, people with holiday lets and those who let houses in multiple occupation.
The campaign will give landlords who owe tax the opportunity to come forward voluntarily to put their tax affairs in order. If they do not do this and HMRC finds them first they will face bigger penalties and could face criminal proceedings.
HMRC say “Our campaigns offer people a chance to get their tax affairs in order on the best possible terms. They provide tools and information to help people do that; to help people keep their affairs in order; and to help stop people getting it wrong in the first place. Where people choose not to take the chance to set the record straight, we use the information, gathered before and during the campaign, to conduct follow-up work. This includes investigations and prosecutions.”
If you receive a letter from HMRC on this or any other campaign please speak to your normal contact or Nick Haines who specialises in property matters – getting your compliance position right and providing appropriate evidence to HMRC can be a balancing act. We can help you through the process.