Let Property Campaign

Whatever we think of HMRC, bless them, I have to say I believe they are entirely fair.

At least they have been in my dealings with them.

A little black and white, maybe, but entirely fair nonetheless.

A little bit difficult to deal with, sometimes, but entirely fair.

A little intransigent, I grant you, but entirely fair.

That's why I'm a bit surprised at the HMRC Let Property Campaign (LPC).  A whole unit has been set up within HMRC to make the campaign run smoothly and in my dealings with them they have been excellent.

Just to recap what the LPC is all about.

Some people own a second property which they let out to tenants.  They receive rent from their tenant and if the income received is more than the allowable expenses they make a profit.  This profit is taxed... as long as HMRC knows about it.

That's why, with a very few exceptions, everyone who rents out a property needs to fill in a self assessment tax return every year to declare this profit.

However, for whatever reason, some people don't do this.  They've forgotten they have the property, they don't think they need to fill in a tax return, the dog ate it and so on...

And once a tax return is missed one year and the world doesn't come to an end, the following year it's just a little easier not to complete a return and the next year is easier still.  

All of a sudden 10 years have been missed and now the weight of guilt begins to build up.  The person in question is just waiting for the letter, the 'phone call or even the visit (very unlikely) from HMRC to say 'you're nicked, mate'.

But all HMRC wants, being entirely fair, is everyone to pay the tax they are due and so the Let Property Campaign was born to make it easy for landlords to bring their affairs up to date (to quote the website).

There are two ways the campaign works.  A landlord can 'fess up' and get in touch with the campaign to say they have a property and they want to take part in the campaign.

Or...

HMRC gets wind of the property and writes to the landlord with a reference number and inviting them to come clean.  And, by the way, if you have a property you haven't declared this is getting more and more likely as the landlord registration scheme really kicks in.

Option 1 (fessing up voluntarily) is preferable from a fines point of view but in either case the process is simple enough: work out what level of profit you made by renting out the property over however many years you've had it, select the level of penalty you believe you should pay, work out the interest that's due and make an offer to HMRC.

They'll check your figures and either say 'yes' or 'no' depending on whether they believe you.

Once they agree and you pay everything becomes formal and that's it.

You get to sleep easy again.

We've completed quite a few of these now for a customers and we do all the negotiation with HMRC and even fill in the forms.

If you need any help or even just want to talk through your options, get in touch: 0131 202 9888 or via Facebook:

facebook.com/accountantsedinburgh