The Blog

What is the Let Property Campaign (LPC)?

In 2013 HMRC launched the Let Property Campaign (LPC) which allows landlords to declare previously undeclared property income or gains. To date over 10,000 landlords have used this voluntary disclosure scheme. This disclosure often leads to a lower penalty of 0-20% of lost HMRC revenue depending on case by case circumstances.

The LPC is aimed for individuals that own residential properties and does not apply to businesses or commercial properties. Once a voluntary disclosure has been submitted landlords have up to 90 days to pay the tax due.

HMRC is cracking down on landlords with undisclosed property income or gains. If a landlord is found to be evading tax and not made a disclosure, they will be fined up to 100% of the tax due and may face criminal proceedings.

HMRC are using an increasing number of channels, such as the Land Registry and Deposit Protection Schemes, for their investigations. Therefore, it is important for landlords to ensure there are no financial irregularities in their finances.

Once HMRC opens an investigation, a voluntary disclosure will no longer be allowed. The LPC does not yet have an end date by which time disclosures should have been made but it will not last forever.

HMRC are introducing severe penalties elsewhere in the tax regime which will be up to 200% of the tax that becomes due. The disclosure will close at some stage and therefore you should act now and speak to a tax specialist if there is a disclosure to be made.

If you have a question or would like more information about LPC then please contact Anthony Middleton for expert advice at anthonymiddleton@ormerodrutter.co.uk or 01905 777600.


DSC6529 (1)About the Author

Anthony specialises in guiding a taxpayer through the complex process of an enquiry by HMRC, mitigating tax and penalties wherever possible.

 


 

Let Property Campaign brings in £7.9 million in additional landlord tax

HM Revenue and Customs have been targeting UK landlords with the Let Property Campaign since autumn 2013, in part of a series of campaigns in their continued tax avoidance crackdown.

UK Landlords who make an income from residential properties at home or abroad (including holiday homes, specialist landlords and those above the ‘Rent a Room Scheme’ threshold) have been encouraged to disclose any previously undeclared tax under the Let Property Campaign.

The campaign offers more favourable terms to those who make a voluntary disclosure.

In 2014, HMRC reports that around 40,000 landlords who had failed to come forward were sent a letter which gave them 30 days to bring their tax affairs up to date. However, those who made a ‘prompted disclosure’ as a result of these letters were not offered the same favourable terms.

Ignoring the letter risks penalties of up to 100% of the unpaid tax liabilities and up to 200% of offshore related income. HMRC can also conduct an investigation and in certain cases the result may be criminal prosecution.

It is suspected that many buy-to-let landlords with undisclosed rental profit have misunderstood the rules. The most common misconception is that all mortgage repayments can be offset, however only the interest proportion is permitted.

Even if landlord tax is undeclared or under-paid because of an error or misunderstanding, it’s important that they come forward to bring their tax affairs up to date as soon as possible.

It is reported that HMRC have raised £7.9 million in additional tax as a result of the campaign so far.

Many letting agents have also received statutory notices and are legally obligated to give HMRC access to their landlord records. HMRC can also access records held by the Land Registry to detect undeclared income. Their software is getting more sophisticated and the records they can access is increasing.

 

The Let Property Campaign is one of a series of campaigns targeting different sectors and industries, and with an increase in data gathering the message is clear – it’s better to come forward and get your records in order now, rather than trying to hide.

For more information about the penalties that apply, Download our free guide to Landlord Tax Penalties.

 

Landlords with undeclared or under disclosed rental income, who have not yet been contacted by HMRC, are strongly urged to bring their records up to date as soon as possible. Favourable terms and affordable repayment plans can often be negotiated.

If you would like to discuss this further, or you have received a letter from HMRC about the Let Property Campaign, please contact us to speak to Anthony Middleton.

HMRC Let Property Campaign

The Let Property Campaign is an opportunity for landlords to come forward and declare previously undisclosed income to the tax authorities.

We are currently seeing more individuals receive a letter from HMRC under the title of the Let Property Campaign.

We recommend that landlords who have undeclared rental income make a voluntary disclosure to the tax authorities using the Let Property Campaign. Lower penalties and payment plans can be negotiated for those who come forward and make what is known as an unprompted disclosure to the tax authorities.

If HMRC have sent you a letter under the heading Let Property Campaign, the disclosure will be classed as prompted and the penalties charged less favourable. Remember, penalties are tax geared, and are based on a percentage of the tax due as a result of the previously undeclared income.

Should the Let property Campaign close without you receiving a letter under the Let property Campaign or you having made an unprompted disclosure, and HMRC later find out about the undeclared income, then penalties will be severe, potentially up to 100% of the tax due and landlords risk being investigated under Code of Practice 8/9 with the possibility of a criminal prosecution.

Landlords should also remember that HMRC have a wealth of information to identify individuals who have not declared rental income. This includes computerised records from other government agencies including the Land Registry, together with the details passed to them by letting agents who have been compelled to pass the names and contact details of registered landlords.

For further information, or to arrange a free initial consultation please telephone Anthony Middleton on 01905 777 600.

By continuing to use the Ormerod Rutter site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close