The Let Property Campaign is an HM Revenue and Customs (HMRC) initiative that offers a way for people letting out the property to disclose any unpaid tax and get up to date with their tax affairs.
HMRC has acknowledged that many people who let property do so without declaring income to HMRC. So, the campaign is designed to allow people to get their affairs in order without facing penalties.
The campaign applies to residential and commercial properties, and anyone who has been letting out property since April 2017 can come forward and disclose their unpaid tax. Those participating in the campaign will have until March 2020 to disclose any unpaid tax and will only have to pay the tax due for the 2017/18 tax year.
The minimum amount of tax must be paid, £3,000, but this can be paid in instalments over three years. Anyone who comes forward and discloses their unpaid tax will also be allowed to bring their tax affairs up to date for previous years.
However, they will need to pay any tax due for those years, as well as interest and penalties. The interest and penalties are diminished if the tax owed is paid within three months, and HMRC has said that it will consider exceptional circumstances on a case-by-case basis.
Those who do not come forward and disclose their unpaid tax could face criminal prosecution, and HMRC has observed that it will use its powers to investigate those it suspects of evading tax.
This article provides an overview of the let property campaign and how it works. It also includes information on what people need to do if they want to participate in the campaign and how HMRC will deal with those who do not come forward.
If You Failed to Notify HMRC About Receiving Letting Income
You may have to pay the penalty if you fail to notify HMRC about receiving letting income. The penalty amount will depend on how much you owe and how long you have been evading taxes. Often, the penalty can be as high as 100% of the tax owed. If you face a significant penalty, you may consider contacting a tax specialist to help you negotiate with HMRC.
Tell Me the Penalty Rate for Using Let Property Campaign?
The penalties are generally divided into several ranges. These varying ranges depend on HMRC views regarding behaviour and whether the disclosed data is purely unprompted or required.
The first penalty level, usually reserved for those who make spontaneous and voluntary disclosures, is 0% to 10% of the tax due. The second level, generally given to those who make prompted but not required disclosures, is 20% to 30%. For those who do not make any disclosure at all, the third and final level is 50% to 100%.
To avoid penalties, you should thoroughly and promptly disclose to HMRC as soon as you know that you have potentially underpaid tax. By doing so, you can take advantage of the let property campaign’s reduced penalties.
Tell Me the Best Thing to Do?
Do you have an option? It’s a stressful environment, but above mentioned five steps can help. You can tell HMRC about the non-payment of rent taxes through the Let property campaign. If there are discrepancies in your taxes on the rental income, you pay the tax you are owed. The notification process is simple. It’s your responsibility to report any tax problems to your tax professional.
The best thing to do is to make full and prompt disclosure to HMRC as soon as you know that you have potentially underpaid tax. You can take advantage of the let property campaign’s reduced penalties.
Tell Me the Meaning Of “Voluntary Disclosure ” To HMRC?
If you’ve paid taxes on your earnings and didn’t pay them properly, you can ‘disclose’ them to HMRC. In some cases, voluntary reporting is a more costly form of amnesty for tax evaders than the HMRC.
Voluntary disclosure is generally used for people who have not been found out and come forward. Using the let property campaign to make a disclosure is often cheaper because the penalties are lower.
What Should I Do If I Want to Participate in The Let Property Campaign?
If you want to participate in the let property campaign, you must notify HMRC of your intention. You take care of this by writing to HMRC or by calling their helpline. Once you have notified HMRC, you will need to provide them with information about your letting income and expenses.
You will also need to pay any tax owed, plus interest and penalties. HMRC has said it will use its powers to investigate those it suspects evading tax.
What Should I Do If I Don’t Want to Participate in The Let Property Campaign?
If you don’t want to participate in the let property campaign, you should continue to pay your taxes as usual. However, if HMRC suspects you have not been paying your fair share of tax, it may launch an investigation. If syou are found to have evaded taxes, you may face significant penalties.
Can I Put Rental Income into a Pension UK?
Yes, you can put rental income into a pension in the UK. However, there are some restrictions on how much you can contribute. For example, you can only contribute up to £40,000 per year (or 100% of your annual earnings, whichever is lower).
How Can Team Help?
Our highly skilled tax resolution specialists, tax accountants in Bolton, provide personalized assistance to our clients on how to make tax matters fair. Legend’s tax resolution specialists have helped many clients and agents update their past tax issues. We’re proud to help our customers reduce penalties to a fraction of the average maximum penalties initially faced.
Legend financial tax resolution specialists in the UK can help you with:
- Determining if you should make a voluntary disclosure to HMRC
- Calculating how much tax, interest, and penalties you may owe
- Preparing and filing your disclosure to HMRC
- Negotiating with HMRC on your behalf
- Representing you in an HMRC audit or investigation
Don’t doubt to contact our professionals if you need assistance with your taxes. Our Team of specialists is here to help you resolve your tax issues.