Undeclared Rental Income from property

HMRC has launched a new campaign to get people who have not declared all their rental income to come forward.

The obligation is on the taxpayer to come forward and meet their obligations by a set deadline. The campaigns offer a carrot and stick approach: the best available terms for those who come forward, but a tough approach to those who do not.  Let Property Campaign – details HMRC estimates that up to 1.5m landlords in the residential property sector may be underpaying up to £500m in UK tax every year.  The campaign is open to all residential property landlords with undeclared income. It is aimed at a large group of people and will be running for at least 18 months. HMRC has not (as far as we can see) published the date when it will close.  Unlike most previous campaigns which have two deadlines (one to notify HMRC and a final one to make the disclosure), the opportunity to come forward voluntarily will remain open throughout the period of this campaign.  HMRC says it appreciates that some people will have made honest mistakes, and some may not be fully aware that the rent from a property is taxable. Others will be deliberately evading tax. By coming forward voluntarily, people will receive the best possible terms, including a lower penalty than if HMRC comes to them first. Though note that there should be no penalties at all for those whose behaviour has been neither careless nor deliberate.  HMRC will use information it holds about property rental in the UK and abroad, along with information already held on HMRC‘s digital intelligence system Connect, to identify people who have not paid what they owe. Those that don’t come forward could get a penalty of up to 100% of the tax due and a possible criminal prosecution.  From next year, HMRC may contact any landlord that it thinks has not declared all their rental income. Those contacted will not then be able to make use of the opportunity offered as part of this campaign.   HMRC offers more help for landlords by calling HMRC’s Let Property Campaign Hotline on 03000 514 479, between 9am and 5pm, Monday to Friday. 

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