A Let Property Campaign has been launched by HMRC which is aimed at landlords who let out residential property without paying income tax on the net rents.
HMRC is now reviewing Land Registry, Council Tax and other government agency records and will actively pursue anyone who is deliberately ignoring or not understanding the tax rules and have not been paying Income Tax on buy-to-let properties, holiday homes and student rentals etc.
However, HMRC is giving a period of grace for tax payers who voluntarily come forward to declare their income and any tax due. If a disclosure is made voluntarily “preferential terms” will be given, in particular, lower penalties. If the campaign is not used the maximum penalty will be 100% of unpaid tax on top of the tax and interest.
This new campaign will last for 18 months but from next year, HMRC may contact landlords directly to enquire about their tax affairs and once contacted it will be too late to make the “voluntary disclosure campaign”.