What you need to know about the Let Property Campaign

In light of the recent announcement by HMRC that it will be attempting to collect the relevant tax from previously undeclared or under-declared rental income, we have put together a simple guide to the Let Property Campaign.

What is the Let Property Campaign?

The Let Property Campaign gives landlords a chance to revisit their records and ensure that they have paid the right amount of tax on their rental income. Those who are believed to have an incorrect position and fail to voluntarily declare it will receive a letter inviting them to make a disclosure.

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Who does the campaign apply to?

The campaign targets anyone letting either a single residential property or multiple properties. This includes those renting properties abroad and those living abroad and renting out a UK property. It also applies to anyone with a UK holiday home that is let, even if they use it themselves.

What happens if I don’t declare my income?

Ignoring HMRC’s letter or failing to disclose an incorrect position could result in a penalty of up to 100% of the unpaid tax. In extreme situations, a criminal investigation may be initiated to claim the tax owed.

What if I’m making a loss on my property?

Even if you are making a loss, you should respond to HMRC’s letter within the 30-day period. It may be that they hold incorrect information, so you will need to update them on your circumstances.

How do I disclose undeclared tax?

If you’ve checked your records and discovered that you owe tax, you can inform HMRC under the Let Property Campaign by filling in a Digital Disclosure Service (DDS) form. HMRC will then send you a Disclosure Reference Number (DRN), and you can proceed with providing details of the error.

What expenses can I claim for?

Bear in mind that you can claim for a range of expenses, which include:

  • Mortgage interest
  • Repairs
  • Insurances
  • Professional fees

When checking your expenses and income records, we strongly advise seeking assistance from a tax specialist. Employing a qualified professional can help you to ensure your calculations are correct, and they can also negotiate any settlement that’s required with HMRC on your behalf.

When should I pay the amount owed?

Once you’ve submitted the relevant form, HMRC will send an acknowledgement. Your disclosure form (DO2) is due three months from the date of this letter. This form outlines the rental calculations, and payments should be made on the date they’re submitted, as an element of interest is involved, which is based on the date you make payment.

Is there any guidance from HMRC?

The latest guidance from HMRC on the Let Property Campaign and how to make a disclosure can be found on gov.uk. You can also contact them via their helpline on 0300 123 0998.

 

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