The tax man is sending out threatening letters to landlords as a nudge to report unpaid tax on rental profits and the sale of letting property.
Thousands of landlords are receiving the letters in a bid by HM Revenue & Customs (HMRC) to recover more than £500 million a year the Treasury believes goes unreported in every tax year.
“HMRC has data relating to landlords and is comparing this with what individuals have or have not told us,” says the letter. “HMRC is aware you are a landlord who is letting property and that you may be liable to tax on that income.”
Landlords are then invited to clear up their tax affairs via the Let Property Campaign, a disclosure channel that offers reduced tax penalties for declaring unpaid tax.
Property investors receiving the letter are likely to have a financial profile on HMRC’s spy technology that collects information about rented homes from the Land Registry, the voters list, housing benefit records and letting agents.
To take part in the Let property Campaign, landlords should call the HMRC on 03000 514479.
The disclosure campaign is expected to run until summer 2015.
HMRC is targeting property investors who may have sold or gifted property in recent years as well as those currently renting out homes.
The scope also nets second homes and holiday lets
“Property owners who fail to get in touch may risk a criminal investigation and some serious penalties,” said an HMRC spokesman.
“The message to property owners who have not paid their tax is HMRC knows about you and will make sure you pay the right amount of tax on rental profits or chargeable gains – and if you don’t tell us the penalties will be tougher if we have to come after you.”