The Let Property Campaign and all you need to know
The Let Property Campaign applies to you if you are an individual landlord and have received rental income that you have not declared to HMRC.
If this does apply to you it’s imperative you read on to find out more about it and what it means to you.
What is the Let Property Campaign?
“The Let Property Campaign is an opportunity for landlords who owe tax through letting out residential property, in the UK or abroad, to get up to date with their tax affairs in a simple way and take advantage of the best possible terms”
What happens if I have undeclared rental income?
If you have undeclared rental income, don’t wait to be found out as there will be penalties if you owe money and they will be much, much larger if HMRC writes to you! If an underpayment of tax is discovered by HMRC this is what is called a ‘Discovery Assessment’ and the penalty regime is much higher than if you tell HMRC up front that you have undeclared income. If the worst-case scenario happens and you are investigated under the Discovery Assessment and it is found that your underpayment of tax is deliberate, HMRC can go back 20 years!
Am I classed as an individual landlord?
There is still some confusion amongst individuals as to whether they are classed as an individual landlord or not. Individual landlords include:
- All landlords whether they have single or multiple rental properties
- Specialist landlords with student or workforce rentals
- Holiday lettings
- Renting out a room in your main home for more than the Rent a Room Scheme threshold
- Those living abroad or intending to live abroad for more than 6 months and rent out a property in the UK
Who is not classed as an individual landlord?
Those who are not classed as individual landlords and therefore exempt from the Let Property Campaign are:
- Landlords renting out non-residential properties including:
- Shops
- Garages
- Lockups
What do I need to do under the Let Property Campaign?
Under the Let Property Campaign, you must ensure you disclose all rental income to HMRC. Once you start to receive any rental income you need to inform HMRC by 5 October after the end of the tax year for which you start to receive that income. For example, if you received rental income on a property in the tax year 2020 to 2021, you need to declare this to HMRC by 5 October 2021.
How do I disclose my rental income?
HMRC have an online service to disclose your rental income. Once you notify HMRC of your intention to make a disclosure you are given 90 days to submit the details and calculate the tax and penalties that you owe.
You can complete the declaration yourself or use a nominated partner, company officer or agent, such as an accountant, to do this on your behalf.
What do I need to do to prepare my disclosure?
Before declaring your full disclosure for the Let Property Campaign, do the following:
- Calculate what you owe
- Calculate the total rental income for each year you have previously failed to inform HMRC about.
- Calculate any allowable expenses on the undisclosed rental income
- Calculate how much tax you owe on this income depending upon your personal tax code and other income. HMRC have an online calculatorto help you with this.
- Calculate the penalties that are due
How do I get help to prepare and submit my disclosure?
You can undertake the calculations yourself, but it may well be prudent to take professional advice which could pay dividends. A professional such as Maynard Johns can help you with rental losses from previous years, allowable expenses as not all may be allowed and the penalty calculations and more complex affairs.
Come to Maynard Johns for advice so we can handle all aspects of the declaration for you. We will do all the calculations and deal with HMRC on your behalf!