Time is running out for buy to let landlords and second home owners who want to tell HM Revenue and Customs about tax they have not paid.
HMRC’s Property Sales Campaign is a chance for them to come clean over unpaid tax.
But they must register by August 9, 2013 and declare the unpaid tax by September 6, 2013.
If the deadline is missed, HMRC will launch investigations against property investors suspected of evading tax and will add penalties and fines to the amount they owe.
In some cases, criminal prosecutions may follow the inquiries.
“The Property Sales campaign is an opportunity for you to bring your tax up to date if you have sold a residential property, in the UK or abroad, that’s not your main home. If you made a profit but have not told HMRC, you might not have paid the right amount of tax. To take advantage of the best possible terms you must voluntarily disclose your income or gains and pay what you owe by September 6,” an HMRC spokesman warned property investors.
Task forces are already at work in several areas of the country chasing down landlords who have sold homes without paying capital gains tax or who have not declared tax on rental profits.
A dozen Yorkshire landlords have faced criminal prosecution, while around £4 million in unpaid tax has been collected in the South-East.
Accountants UHY Hacker Young warn HMRC is building a database of undeclared buy to let homes by cross-matching Land Registry records, housing allowance payments, electoral roles, letting agent rent information and HMRC’s own in-house records.
Mark Giddens, head of private client services at UHY Hacker Young, said: Buy-to-let investors need to be aware of HMRC’s increasing concern about tax evasion by landlords. The amount of tax collected from landlords and second homers is up 10% already and expected to increase further.”©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.