HMRC is once again urging landlords to come clean and declare any undisclosed tax they may owe. The Revenue believes that there is at least £550 million owing from landlords and they are determined to claw some of it back.
Property Let Campaign
The Property Let Campaign is currently in full swing and landlords are being encouraged to come forward voluntarily or face steep penalties. HMRC is targeting landlords who have failed to declare rental income from previous years, plus those who may have incorrectly filed their tax returns. Landlords who come forward of their own free will face a penalty of up to 20%, but those who don’t and are subsequently caught out by HMRC will be severely penalised, and could even be prosecuted.
How do HMRC Catch Landlords?
Thanks to the wonders of modern technology, HMRC have all kinds of sources of information at their disposal. Tax officials are able to obtain data from letting agents and local authorities, plus they can track down landlords who advertise their properties on websites or even in newspapers. They are also receptive to anonymous tip-offs from the general public or a disgruntled tenant.
“You’d be amazed at how many people ‘dob’ each other in,” said a HMRC spokesperson.
It was a Mistake, Your Honour!
Everyone makes mistakes from time to time and HMRC will waive a penalty if they feel that a landlord was genuinely not trying to pull a fast one. However, it is likely to be difficult to persuade HMRC that you were truly unaware of your tax obligations.
