Wednesday 9 July 2014

Landlords, have you fully declared all your rental income?


Our sources tell us that HMRC has sent out a second batch of letters to 40,000 landlords whom it suspects have either not declared or under-declared rental incomes. Part of the Let Property Campaign, landlords who have already received letters and who have not made a voluntary disclosure could face severe penalties and the possibility of criminal prosecution.
 

Although HMRC generally goes back six years, the law allows it to go back up to 20, warns chartered accountancy firm Jeffreys Henry http://www.jeffreyshenry.com/. The firm says that any landlord with undeclared rental income, or who has been under-declaring it, should come forward to make a voluntary disclosure before they receive a letter. Anyone making an unprompted voluntary disclosure will be able to negotiate lower penalties and affordable payment plans.
 

For the thousands of landlords who have already received letters, it is too late. Any disclosure they make now will be regarded as “prompted”. Interest will also be charged from the date the tax is due until the date it is actually paid.

 
HMRC is using a wealth of information to identify landlords who have not declared their rental income. These include records from other government agencies and local authorities, and also the tenancy deposit schemes and Land Registry.

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