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HM Revenue & Customs (HMRC) believe they’re missing out on around £550 million each year as a result of undisclosed rental income. Less than 500,000 people are registered as landlords for tax purposes, but HMRC reckon there could be another 1 million property owners in the UK and abroad who have yet to disclose their rents.
With this in mind, HMRC’s Let Property Campaign offers 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 many cases, a voluntary disclosure to HMRC under this campaign can result in favourable treatment in terms of penalties.
The current campaign is open to all residential property landlords, including the following:
• those that have multiple properties
• landlords with single rentals
• specialist landlords with student or workforce rentals
• holiday lettings
• property held overseas and let by UK residents
• anyone renting out a room in their main home for more than £4,250 per year, or £2,125 if the property was let jointly
• those who live abroad and let property in the UK
If you’ve not got round to notifying HMRC of your landlord status, or someone you know is in this position, now is the perfect time to bring everything up to date.
We can assist with making a disclosure under the scheme, and can help with any other rental income queries. Reporting obligations, what records to keep, how rental income is taxed, what can and can’t be claimed as allowable expenditure, how rental losses can be used – these are some of the more common landlord issues we look at regularly for clients, to ensure their property tax costs are kept to a minimum.
For an informal chat, just get in touch with your usual Springfords contact, or call the Springfords Tax Team on 0131 440 5000.
This is a general guide which is intended to give background information and is not a substitute for taking specific advice based on your particular circumstances.