Have you declared all the relevant information to HMRC regarding your rental property? The rental income needs to be declared on your tax return.
If you haven’t, you’re at risk of serious repercussions – but HMRCs Let Property Campaign allows you to make a disclosure and potentially avoid or lessen a penalty.
Do you need to pay tax on rental income?
If you make money from renting out a property, the chances are you’ll need to complete a tax return and pay tax on your income.
There’s a £1,000 tax-free allowance which applies to property income, but above this amount you’ll need to contact HMRC or file a self-assessment tax return, as income tax could be due.
You might also need to pay class 2 National Insurance on your profits if your rental activity counts as a business. And if you sell a property, there may be capital gains tax to report and pay.
Even if you’re not a professional landlord, this applies to you. If you’ve just inherited a property, for instance, or you’ve moved in with a partner and decided to rent out your previous house, you’ll need to check your tax obligations.
Unfortunately, this is something that catches many people out, who might not realise they were required to complete rental accounts, report on capital gains tax, or fulfil other tax obligations until after they’ve missed the deadline.
This is where the let property campaign can help.
What is the Let Property Campaign?
The Let Property Campaign is a Government scheme that allows landlords who owe tax on their income to declare it to HMRC through a voluntary disclosure.
By doing so, they can receive a reduced penalty or potentially avoid a fine altogether.
It’s open to all residential property landlords with undisclosed taxes, including:
- multiple properties
- single rentals
- student or workforce rentals
- holiday lettings
- renting out a room in your main home (above the rent a room scheme threshold)
- those who live abroad or intend to live abroad for more than 6 months and rent out a property in the UK
It’s not open to non-residential property landlords, however or those who want to disclose on behalf of a company or trust.
How to disclose through the let property campaign
To make a disclosure, you’ll first need to tell HMRC you want to take part in the let property campaign. From there, you’ll have 90 days to work out and pay what you owe.
This includes telling HMRC about your undisclosed income, gains, tax and duties, making a formal offer for the full amount of everything you owe, and paying that amount once HMRC has accepted it.
It’s important to take the time to get your disclosure right, making sure all the information you provide is correct and complete, and that you understand what you’re paying and why.
Talk to us
Whatever your situation, we’re on your side to help you set things straight. It can be a stressful and worrying time so having professional accounting help is very important.
We’ll help you to understand what your tax obligations are and what you might have missed, and check that you make a full and accurate disclosure.
Get in touch to talk about tax on your rental property.
