Let Property Campaign

Let Property Campaign Explained

The Let Property Campaign is an opportunity for landlords who owe tax through letting out residential property, in the UK or abroad, to get up to date with their tax affairs in a simple way and take advantage of the best possible terms.

If you are a landlord and you have undisclosed income, you must tell HMRC about any unpaid tax now. You will then have 90 days to work out and pay what you owe. This is called an unprompted disclosure in that the individual volunteers to HMRC that they wish to declare rental income.

The scope of the Let Property Campaign

The Let Property Campaign is an opportunity open to all residential property landlords with undisclosed taxes. This includes:

  • 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 abroadfor more than 6 months and rent out a property in the UK, as you may still be liable to UK taxes

This campaign is not open to those landlords who are letting out non-residential properties such as a:

  • shop
  • garage
  • lock up

You cannot use the Let Property Campaign if you want to disclose income on behalf of a company or a trust. Also, different rules apply to Landlords who jointly own property with their husband, wife, or civil partners.

Unlike many historic HMRC campaigns, the Let Property Campaign has not got a date by which HMRC will close it so it is no longer available. The Let Property Campaign is a way for anyone who has income from letting out a residential property to put their tax affairs in order.

To participate in the Let Property Campaign an individual must have rental income to declare to HMRC. Most people do not notify HMRC of the fact that they have rental income as often by the time the costs and mortgage have been deducted from the rental income there is little if any profit and before the dramatic fall in interest rates in 2008 this was generally the case. People are not aware that regardless of whether they make a profit or not then rental income needs to be declared to HMRC.

 

How can you take part in the Let Property Campaign?

Periodically HMRC has the legal power to obtain information regarding housing benefit or from letting agents and in turn HMRC will write to the individual to whom the rent is paid and invite them to take part in the Let Property Campaign. This is called a prompted disclosure and has a higher penalty than unprompted disclosures.

For instances where there are reasonable records and only one property then the 3 month suggested deadline is reasonable where an experienced tax advisor is doing the calculation and the profit and loss account. For more complex cases, although HMRC suggest the 3 months, if it is going to take longer to complete the Let Property Campaign forms then we have found that clear communication will result in the agreement of extended time to deal with the Let Property Campaign.

When the form is received by HMRC they are entitled to ask questions but having undertaken hundreds of these types of disclosures we have found that providing good information is provided to HMRC with the Let Property Campaign form then they generally get accepted.

Disclosing unpaid property tax

HMRC are only interested in receiving the LPC disclosure form if there is tax due. In some cases, there will be losses and we always send HMRC a copy of the profit and loss account showing the losses and confirm that they will be taken to the self-assessment tax return to set against future profits.

HMRC claim that the Let Property Campaign gives an individual a more favourable penalty position than if they made a disclosure by other routes. Although we do not necessarily agree with this statement it is the only route for people who have undeclared rental income only.

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