As part of its Let Property campaign, HMRC has been sending ‘nudge’ letters to those who it suspects have not been declaring all of their rental income.
Recently it seems that HMRC has taken a tougher approach, and is targeting those in the short-term rental market.
It was recently made known that the Airbnb booking platform was compelled to provide HMRC with income data for all of its UK-based hosts dating back to the 2017/18 tax year. If the information provided by Airbnb is not consistent with the income declared on a person’s tax return, that person could face a discovery assessment and penalties.
If you think you may have underdeclared your property income, now is the time to act; you can make a disclosure under HMRC’s Let Property campaign which offers favourable terms and reduced penalties for making a disclosure. On the link provided to the guide further down this article, it explains landlords will need to notify HMRC now that they want to make a disclosure, they will then have 90 days to work out and pay what they owe.
It affects landlords of residential property, both in the UK and abroad, with undisclosed taxes, including:
- those that have multiple properties
- landlords with single rentals
- specialist landlords with student or workforce rentals
- holiday lettings
- renting out a room in your main home for more than the Rent a Room Scheme threshold
- those who live abroad or intend to live abroad for more than 6 months and rent out a property in the UK (as you may still be liable to UK taxes)
More information about the campaign can be found here: https://www.gov.uk/government/publications/let-property-campaign-your-guide-to-making-a-disclosure/let-property-campaign-your-guide-to-making-a-disclosure
If you are a client please remember to keep us informed of all your sources of income, including rental properties, and if you think you may be impacted by this campaign, please get in touch. If you are not a client and would like some help and advice, feel free to contact Rachel on 01242 776000 or email email@example.com.