Landlords warned: take advantage of tax amnesty or face a heavy fine
Residential landlords who have outstanding tax debts from renting out properties should take advantage of a Government amnesty, warns Tees Valley tax expert George Hardey of Waltons Clark Whitehill.
Her Majesty’s Revenue and Customs (HMRC) has launched the Let Property Campaign aimed at collecting unpaid tax from those who are letting properties and not paying the correct tax. Those who fail to come forward risk being the subject of an investigation as well as being handed heavy fines.
Landlords who have unpaid taxes, either through deliberate evasion or lack of correct understanding of rules, are being given an amnesty period in which they can pay what they owe, along with reduced penalties and interest due.
However, George, Senior Tax Manager at Hartlepool based Waltons Clark Whitehill, warned: “HMRC holds a lot of information about property rental, both in the UK and abroad, and also has access to its digital systems, so there isn’t a place to hide when it comes to unpaid tax.
“The Let Property Campaign is the latest move by HMRC to allow people in various professions to get their tax affairs up to date, and it is advisable to do so, because the alternative will be heavy fines on top of what is owed. In the most serious cases penalties could be up to 100% of the tax due and a possible criminal conviction”
Since 2007, HMRC campaigns have collected more than £770m in tax, approximately one third of which is from follow-up activities on people who have not come forward voluntarily.
George said: “The current campaign has not presently been given a deadline, giving time for people to come forward. It is certainly better to pay off what is owed voluntarily than to sit and wait for the proverbial knock on the door, because it is bound to end up much more expensive.
“Many people fall into being accidental landlords, when they are unable to sell a property that they have either inherited or have moved out of, and in such cases it is often that the financial requirements aren’t looked into properly, so this is a group which is likely to be increasingly vulnerable. Particularly when death taxes on an inherited house have already been paid or there is the financial strain of saving for a large deposit, the last thing the landlord wants is a hefty fine from HMRC.”
This was posted in Bdaily's Members' News section by George Hardey .