-Potentially taxing times for landlords-
It may have seemed like a good investment but residential landlords who haven’t declared their rental income could be in for a nasty New Year’s surprise.
HMRC are cracking down on those who don’t pay income tax on their rental income and they could face a hefty bill and penalty for tax evasion.
But help is at hand. Belfast company, ASM Chartered Accountants can help landlords work out exactly how much they should be paying and avoid any penalties.
The government has introduced a new tax amnesty scheme, the “Let Property Campaign” to claw back some of the estimated £500 million that is underpaid by landlords in the UK every year.
Caroline Keenan, Tax Director at ASM said: “There are many reasons why landlords may misunderstand the rules and so not pay the right amount of tax, but instead of waiting for HMRC to uncover any tax evasion, we would recommend that buy-to-let residential landlords should review their affairs, and if applicable consider coming forward by making a voluntary disclosure.”
The ‘Let Property Campaign’ will offer reduced penalties to those who set their tax affairs in order now, while those who are later found to have underpaid their tax could face criminal prosecution.
The Treasury estimates that as many as 1.5 million landlords may not have paid what they owe.
The campaign is the latest in a string of amnesties launched by the Revenue. Since 2007 these campaigns have collected more than £800 million, of which £552 million was recovered from individuals approaching HMRC. The remainder was secured through “follow-up activities” and criminal prosecutions. The Tax Return Initiative, targeted at higher rate taxpayers who have failed to submit a tax return, has secured more than £80 million alone. Health professionals are set to be targeted next.
Caroline continued, “The campaign will last an unusually long time of 18 months during which taxpayers can come forward at any point with a disclosure of their undeclared income from rented properties – we can assist landlords on next steps and assist them in their compliancy requirements at any stage.”
HMRC can rely on a wealth of available information to identify landlords who have either not declared any rents or are not declaring all rents received. This can be from a number of sources including computerised records from other government agencies and local authorities, freely available information from the internet and information gathered from HMRC surveillance or tip-offs from the public.
Landlords who are concerned they may have underpaid tax and would like a review undertaken can contact Caroline Keenan, Tax Director, ASM on 028 9024 9222, or firstname.lastname@example.org.
Picture caption: Brian Clerkin, Managing Director, ASM Chartered Accountants, Belfast is pictured with Caroline Keenan, Tax Director, ASM, Chartered Accountants.