Landlords: What do you know about HMRC’s Let Property Campaign?

It applies to you if you have let residential property in the UK or abroad and have not declared all your income. Whether you have underpaid your tax due to a misunderstanding or deliberately, now is the time to let HMRC know. You’ll then have 90 days to work out what you owe and make your tax, penalty and interest payments. 

 

If HMRC later discovers you haven’t paid all your taxes, it will apply higher penalty charges, outstanding tax and interest. You could even face prosecution. 

 

You should start with HMRC’s online questionnaire. This covers rental income from: 

 

The campaign doesn’t include rent: 

 

You can inform HMRC about your own undisclosed rental income and on behalf of someone who passed away. If you have an agent, you can complete a form allowing them to provide information on your behalf. As part of the process, you must also include any other undisclosed income. 

 

The first step. Let HMRC know you intend to tell them about extra rental income as soon as you realise you owe some tax. You don’t have to provide the details at this stage. Only one person can make a disclosure. If, for example, a husband and wife both have undisclosed rental income they must each contact HMRC. You’ll receive a disclosure reference number and a number to use when you make your payment. 

 

If you’re letting HMRC know about income for someone who died, it’s important to make it clear you’re their representative or executor. HMRC may ask for evidence that you’re authorised to act for them. 

 

The second step. When you have your disclosure and payment reference numbers you must act within 90 days. You must provide information about all your undisclosed income, the tax you owe, along with penalties and interest. If your calculations aren’t correct HMRC might not accept your disclosure, but it should confirm this within 30 days. 

 

You should pay the amount due when you make your disclosure. If you can’t pay the full amount owed, you must agree a payment schedule with HMRC before the payment deadline. It’s best to talk to HMRC before you make your disclosure if you think you might need to do this. 

 

You’ll need information about your annual undeclared rental income and allowable expenses. You don’t have to include information about income you’ve already provided, for example, on a previous tax return. You’ll then need to work out how much you owe on income above your personal tax allowance. HMRC’s calculator might help you work out interest and penalties you owe. You don’t have to declare years where you made a loss, because you won’t owe any tax. However, you may want to use the loss to reduce the tax you owe in following years. 

 

If you don’t have all the paperwork, you must estimate the undisclosed income. HMRC may ask you to explain how you estimated your income, so keep your calculations. You must keep proper records in future or face fines. 

 

If your undisclosed income applies only to the current tax year, you’ll need to register for self-assessment tax (SAT). If the income applies to last year’s SAT return you can make an amendment within 12 months of the filing date. 

 

Once HMRC accepts your disclosure it will expect you to keep your tax affairs in order. You must accurately declare all your income and gains for following years by the required deadlines. 

 

If you have questions about the Campaign, you can contact the Helpline.