LET PROPERRTY CAMPAIGN

If you are UK resident and have undisclosed income, then HMRC has introduced the scheme Let property Campaign to help landlords to declare any owed tax through letting out residential and not commercial properties in the UK or overseas to get up to date with their tax affairs before being caught by HMRC. The scheme is always open.

The scheme can be used by various landlords, including the following:

1. Those with one or more residential properties;
2. Landlords renting rooms in their main home using the Rent a-Room scheme;
3. Landlord who specialise in property lets for students;
4. Landlords with holiday lettings.

The let property campaign is not open to landlords letting out commercial properties unless they also have unreported income from residential property. The scheme cannot be used to disclose income on behalf of a company or a trust.

You can always disclose any unpaid taxes outside the scheme if you want to, but the terms offered will not be the same as if the disclosure was made though the let property campaign scheme. By making a voluntary disclosure of all unpaid liabilities in these circumstances, you can expect a lower penalty charge from HMRC.

To apply for the scheme, you will need to tell HMRC that you want to take part in the scheme, make a formal offer and pay what you owe. When using the scheme, you will choose what penalty you should pay, The normal situation is that you will need to declare the last 4 years, but if you have previously filled a tax returns and did not disclose your unpaid taxes because of careless mistake, then you only need to declare the last 6 years of unpaid taxes,  However, if you were caught by HMRC and is treated as deliberate behaviour, then the law allows HMRC to go back as much as 20 years.

Once all taxes have been agreed and you can not pay all of it at once, you can seek to spread out the payment.

Once you have notified HMRC and applied to the scheme through the online, you will receive unique disclosure reference ( DRN ) from HMRC and 90 days to complete your taxes, which then you will need to work out the tax due, Interest and penalty and send to HMRC, if the calculation is not done correctly your application will be rejected. The scheme can be used for any other income that was not taxed at source or disclosed before, not only residential property income, but others such as Capital gains, VAT, Trust income, Inheritance tax, Interest and any other income need to be taxed.  It is always advisable to seek help from an accountant.

If the property is in joint ownership, then separate disclosure will be needed.  The let property Campaign is not the only option for disclosing, there is another option known as Contractual Disclosure Facility, which can provide immunity from prosecution in cases involving deliberate behaviour. see our blog on the subject. https://adamaccountancy.co.uk/contractual-disclosure-facility/

The link for notifying HMRC.

HMRC: https://letproperty.campaign.gov.uk/)