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HMRC’s Let Property Campaign

Judging by the number of new Clients enquiries we have been getting in the last few months, I feel it is important to get the message across to all new Property Landlords that HMRC are now on the warpath!

Back in the 70’s there was a fantastic comedy sit-com called Rising Damp with Leonard Rossiter as its main star playing the seedy landlord character Rigsby. Now it seems everyone wants to become a ‘Rigsby’. By that I mean, buying a property to rent out. But this is when the Taxman will start to take a keener interest in you!

So, let’s quickly go back to the basics on this. – Now when a property first starts to be rented out, then there is a requirement for the landlord to notify HMRC and then complete a Self-Assessment Tax Return Form at the end of each Tax year. Most people would have of course have recognised this, and so become registered with HMRC and will probably have completed and submitted to HMRC an annual Self-Assessment Tax Return Form.

Some others however, may have taken the view that it doesn’t matter, I will just do a ‘Usain Bolt’ so catch me if you can, Mr Taxman! – If so, this article is aimed at these such people.

But let’s be clear about this, HMRC will not be running the same race as you, and certainly not under the same conditions as you. HMRC are a little bit more ‘savvy’ than that. They will already have other people involved in the race who probably started sprinting at least 10 yards before the starter’s gun was even fired. By this, I mean HMRC have lots of different ways of ensuring they will eventually ‘win the race’. This is due to the many sources of information being fed to them from all different outlets such as Letting Agents, Land Register, Lenders and Mortgage Companies, and Solicitors to name but a few.

So, having now established that this is a race you are unlikely to win, what should you do about it?

First priority is to contact HMRC to advise them of the date the property was first rented out. What was that you just said? – The property was first rented out around roughly the same time that PSY were topping the music charts with ‘Gangnam Style’. So, it will be about 4 years ago then. For a bit of fun, let’s just have a quick straw poll on this, ‘- How many of you out there had a go at doing the ‘Gangnam Style’ dance craze at the time? Ah, I thought so, from the results of the quick poll, we had 73 Yes’s, 6 No’s, and 2 no idea as to what Gangnam Style was? – I really do think the 2 no idea’s need to get about a little bit more!

Anyway, on hearing that the profits from the Rented Property have not been declared to HMRC for at least 4 Tax years, I start to feel a bit like being a passenger on the Titanic – I am getting the sinking feeling!

As a Tax Adviser, I am aware that there will be the 4 years Tax to pay on the Profits earned from the rentals, plus interest and penalties to be charged by the Taxman. This could be a tidy sum as the Taxman will usually charge penalties starting at around 20% of the Tax payable, but these can rise as high as 70% of the Tax payable, if the Taxman believes there has been deliberate and concealed behaviour by not declaring this rental income. – But ahoy there! – There is a rescue ship on the horizon, and the rescue ship is called ‘The Let Property Campaign’.

This is not a new campaign, it has been running since its launch in September 2013 and despite rumours it may be closed, HMRC have stated it will remain open certainly for the time being.

HMRC have publicised that since the launch of this campaign, more than 10,000 landlords have come forward and disclosed the Tax payable under this campaign. This has resulted in more than £50million additional Tax being collected by HMRC under this campaign. – Now that’s an awful lot of ‘Rigsby’s’ coming out of the basement and up the stairs!

So, how safe is this rescue ship? – well by applying for, and complying with, the terms and conditions of the Let Property Campaign, there is a great opportunity with careful help and assistance, to substantially reduce the penalty position and just as importantly, to get your Tax affairs in order. But you do need to act fast on this as the favourable terms of this campaign only apply if you apply for this before the Taxman contacts you about it.

At JCL (Jones Cooper Limited) we have had great success in virtually all cases we have handled under this Let Property Campaign with some of the cases being settled on with only a 10% penalty position being imposed.

So, if you are aware of any of your friends, relatives or business acquaintances who do need help in this area, then get them to act quickly on this, and please get them to get in touch with me.

The rescue ship is waiting!

Rickey
Rickey Cooper FFA, FMAAT, ATT
JCL – Jones Cooper Limited

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