Landlords, the taxman cometh… HMRC is beginning to focus on landlords that are not properly (fully) declaring the income that they receive from rental property. HMRC estimate that 1.5m landlords may have underpaid or failed to pay up to £500m in tax between 2009-2010. The campaign is fairly general, but emphasis will be placed on those with more than one let property. They will also focus on specialist landlords – such as landlords to students.
Please remember that if you are going abroad and let your home, this is still potentially assessed as UK income and would therefore need to be fully disclosed. The HMRC campaign, like those before it gives taxpayers the chance to come forward and declare the income and voluntarily put their affairs in order. This is therefore an opportunity for many landlords to come clean about income. Obviously, those that wait for HMRC to come knocking on the door will face a rather more sanguine attitude to non compliance – and remember non payment of taxes can carry a custodial sentence…. not something that anyone wants “by mistake”. So make sure that your Accountant has provided the right information.
Dominic Thomas: Solomons IFA