Landlords who earn rental income are under a legal requirement to report it to HMRC. Some might accidentally overlook this obligation, especially those new to letting property or dealing with several channels of income. The good news is that HMRC provides for an opportunity for landlords to come forward voluntarily under the Let Property Campaign.
Participating in this campaign can allow landlords to correct previous mistakes and reduce fines and prosecution. This article describes how the Undeclared Rent Income Scheme Campaign works and why landlords would be better off joining it.
What Is the Undeclared Rent Income Scheme?
The HMRC Let Property Campaign is an individual landlord’s disclosure scheme for undeclared rental income that is unpaid. It enables them to voluntarily report the unpaid taxes and settle any liabilities on terms that are in their best interests.
Regardless of whether you let one house, a few homes, or you have income from holiday lets or overseas properties, this campaign is open to you. Limited companies and trusts are not eligible, though.
Benefits of Participating
One of the most important advantages of the Let Property Campaign is the reduction in penalties. Typically, HMRC charges penalties based on the seriousness and duration of the underreporting, but voluntary disclosure tends to result in lower fees.
In addition, disclosure through this campaign can help landlords avoid the risk of court action or even criminal prosecution, especially as HMRC continues to increase the level of scrutiny in the housing rental sector.
How to Make a Disclosure
To join the Let Property Campaign, landlords must let HMRC know they intend to disclose through the Digital Disclosure Service (DDS) beforehand. They then have 90 days in which to agree and pay the tax owed after being accepted.
It is worth gathering all of the financial documents, including rent received, permissible expenses, and other income sources, to enable a proper disclosure. Getting professional advice from a tax specialist will make this less complicated and help to maximise legitimate allowances.
Common Errors to Steer Clear Of
One common mistake is misjudging the rental income obtained or claiming too many expenses. Both can trigger HMRC to query the disclosure and potentially raise penalties.
Also, missing the 90-day timeframe upon notification may disqualify the advantages of the campaign. Remaining well-organised and proactive is the key to an efficient process.
How UK Property Accountants Can Help
Handling a voluntary disclosure can be complex, particularly for multiple property landlords or overseas earnings. UK Property Accountants offers expert guidance, guiding landlords through the process from the beginning to completion.
Their specialists are able to review records, calculate unpaid tax liabilities, and handle HMRC on your behalf. This expert service ensures disclosures are accurate and on time, and set up to obtain the best terms.
Conclusion
The HMRC Let Property Campaign presents a valuable opportunity for landlords to regularise their tax affairs with reduced penalties and lower risk of prosecution. Voluntary disclosure is often the most straightforward path to resolving undeclared rental income issues.
If you’re unsure about your rental income obligations or have outstanding disclosures, seeking expert advice from firms like UK Property Accountants can provide peace of mind and help protect your financial interests.
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