HMRC’s let property income amnesty is intended to encourage landlords to get up to date with their tax affairs.
The latest campaign they are running is called the ‘let property campaign’ (LPC) which is aimed at individual landlords letting out property who have not made HMRC aware of all of their letting income. It is open to all residential landlords with undisclosed taxes on say, multiple properties, those using the rent-a-room scheme and even holiday lettings.
If you are unsure if you could benefit from this campaign, please contact Stockport accountants, IN-Accountancy on 0161 456 9666 or email email@example.com. HMRC run these campaigns in the hope that Landlords will make a voluntary disclosure so they are able to settle their affairs on better terms than those who wait until HMRC come to them.
The LPC offers the best deal
Landlords with undisclosed letting income need to tell HMRC that they wish to take part in the LPC, that way they are in line for the best terms available. Once a Landlord has made a full disclosure regarding any undeclared income and gains, they have 90 days to pay what is owed. Landlords must fully cooperate with HMRC to ensure they get the full benefit and receive the lowest possible penalties. The let property campaign is slightly different to the other campaigns as there is no disclosure window, so there is still time to come forward. However, if you delay coming forward you will be charged with higher penalties.
Five stages of disclosure
When making a disclosure, you have the opportunity to tell HMRC how much you think should be paid. HMRC however, may not agree and the penalty will ultimately be payable dependent on why the letting income hadn’t been declared. Those who submitted self-assessment returns but made mistakes will receive much lower penalties than those who deliberately failed to declare their income.
Notify HMRC of the intention to make a disclosure under the campaign. You can do this by either filling in a notification form or calling the property helpline.
The next stage is to make the disclosure; it must be made within the 90 day period of receiving the notification of acknowledgement. You will need to calculate what is owed, HMRC have a calculator on their website which can be used to work out the interest and penalties due. As the calculations can be complicated and to avoid high penalties, contact your accountant to ensure you get the best possible deal.
Completion of the declaration, this is a very important part of the disclosure.
An offer must be made for the full amount owed, letters of offer are included in the disclosure forms which the landlord must complete. The offer, alongside HMRC’s acceptance letter, generates a legally binding contract.
You will receive an acknowledgement once HMRC has accepted your disclosure, it will be sent within two weeks of receipt of the disclosure. However, you need to be aware that making a disclosure cannot guarantee immunity from prosecution. For example, HMRC cannot accept disclosure where the proceeds may come from a serious crime.
Payment should be made within 90 days of the deadline which is given on the notification of an acknowledgment letter, unless HMRC has given additional time.