Landlords who have tax to pay urged to come forward ‘sooner rather than later’

Landlords who have tax to pay urged to come forward ‘sooner rather than later

HMRC’s Let Property Campaign, which provides an opportunity for landlords to come forward and report undeclared rental income and expenditure to HMRC, has so far led to disclosures from less than 3% of its original target, according to new data obtained by top 20 accountancy firm Saffery Champness through a Freedom of Information request.

When the government launched the Let Property Campaign in 2013, it estimated that up to 1.5 million landlords had underpaid or failed to pay up to £500m in tax between 2009 and 2010.

The initiative originally targeted those that have multiple properties, specialist landlords who rent to students, people with holiday lets and those who let houses in multiple occupation.

In the five years since the campaign started, 35,099 people have made voluntary disclosures to HMRC, only 2.3% of the individuals originally identified, while of the estimated £500m in underpaid taxes, the campaign so far has recovered approximately 17.1%, or £85m, of that amount overall.

James Hender, head of private wealth at Saffery Champness, said: “From the outset, the Let Property Campaign was always looking much more widely than just traditional landlords. It also targets those who may have become accidental landlords – such as those with holiday lets or multiple occupations.

“The tax system is becoming more complex and the burden is shifting further towards the taxpayer: this inevitably means individual mistakes and misunderstanding can happen. Looking at the data from the FOI, of the large number of tax payers who stated that they had either failed to notify HMRC of their original liabilities or hadn’t taken reasonable care, many would likely have been unaware that they owed anything at all.

“According to HMRC’s estimates there are clearly many more landlords who have additional tax to pay, but have yet to come forward.  If this is the case, then these people would be well advised to contact the taxman sooner rather than later.

“HMRC have been tightening the net on non-compliance and there are increasingly few opportunities for taxpayers to mitigate the risk of an investigation.”