Following a recent HM Revenue & Customs crackdown on landlords who have not declared rental earnings the tax man has found himself overwhelmed by the response. So much so that many landlords will have quite a wait to find out if their amnesty disclosure form has been accepted.
The HMRC sent out hundreds of letters to landlords in target areas whom they suspected were letting properties without declaring the rental income.
It seems that these landlords have responded positively to the ‘Let Property Campaign’ that encourages disclosure of past rental profits for tax purposes.
The Residential Landlords Association (RLA) have reported that HMRC “has discovered that landlords are flooding the helplines, scrambling to understand obligations.”
HMRC has been warning landlords for some time of the need to file a tax return when they receive rental income from let property. But the response to the campaign shows that many landlords were not heeding the advice and are now coming forward in large numbers to avoid penalties and benefit from the more favourable terms on offer under the amnesty.
Landlords should file a tax return annually even when their rental property is making a loss as losses can be accumulated and carried forward to future years to off-set against future profits.
HMRC has provided on-line information and a tool to help landlords understand their responsibilities and provide clear guidance on how to submit a report.
Help in registering with the HMRC, self-assessment tax return forms and guidance, and other useful bits of information are all provided by HMRC.
HMRC have said the campaign will run for up to four years, so landlords should ensure their tax affairs are in order.
The RLA are currently offering tax training courses for landlords designed to ensure that they fully understand tax reporting, completing their annual return, claiming expenses and minimising the amount of tax they need to pay.
HMRC online Tax Tool – www.gov.uk/check-if-you-need-a-tax-return