If you’re a landlord in the UK, it’s crucial to stay on top of your tax obligations. But if you’ve missed declaring some rental income or made mistakes in the past, it can feel overwhelming.
Fortunately, HMRC provides an opportunity for landlords to come forward and put things right with the Landlord Tax Settlement Campaign.
What Is the Landlord Tax Settlement Campaign?
The Landlord Tax Settlement Campaign is a voluntary initiative that allows landlords to disclose rental income they may have missed declaring in previous years. Whether it’s income from residential properties in the UK or abroad, the scheme is designed for landlords who want to correct their tax filings without facing severe penalties.
Since it was launched in 2013, the campaign has helped many landlords who failed to declare rental income come forward and settle their accounts. It offers an opportunity to clear up mistakes, but it’s important to act before HMRC identifies any discrepancies.
Am I Eligible for the Campaign?
Before jumping in, it’s important to check whether you meet the eligibility criteria. The HMRC Let Property Campaign is specifically available to individual landlords. If you’re letting commercial property or renting via a company or trust, this campaign isn’t for you.
Here’s a quick breakdown of the eligibility requirements:
- You must be an individual landlord renting out residential properties.
- You must have failed to declare some or all of your rental income in the past.
- You can’t be under investigation by HMRC at the time.
If you fit this profile, this campaign could be the perfect opportunity to get your tax affairs in order.
Why Should I Take Part in the Campaign?
You might be wondering, “Why should I come forward now?” Well, if you voluntarily disclose any undeclared income, HMRC offers significantly lower penalties than they would if they discovered the issue themselves. The sooner you act, the better the deal you’ll receive on penalties, which could be reduced considerably for landlords who come forward without delay.
If you decide to take part, here’s a basic guide to the process:
Step 1: Register Your Interest
The first thing you’ll need to do is register online with HMRC. After registration, you’ll receive a reference number that you’ll use throughout the process. This step is simple and only takes a few minutes.
Step 2: Make a Full Disclosure
You’ll then need to disclose all rental income you should have reported, including any expenses or other relevant details. Be as thorough as possible in your disclosure; providing inaccurate or incomplete information could result in higher penalties.
Step 3: Pay the Outstanding Tax
Once you’ve made the disclosure, you’ll need to pay the taxes owed, including any interest for late payments. HMRC may still apply penalties, but they’ll be much lower than if they had discovered the issue on their own.
Step 4: HMRC Confirms Your Disclosure
Once you’ve paid everything due, HMRC will confirm that your tax affairs are in order. With this confirmation, you’ll be free from any worries about previous errors in your rental income reporting.
Conclusion
The HMRC Let Property Campaign is a useful and practical way for landlords to disclose missed rental income and correct past mistakes. Coming forward voluntarily offers reduced penalties and avoids the risk of prosecution, providing a straightforward path to settling your tax affairs.
If you think you may be eligible, don’t hesitate to register and get the process started. Seeking advice from a tax professional can help ensure your disclosure is complete and accurate, giving you the peace of mind that comes with knowing your tax obligations are fully met.
