Do you rent out a house, flat or holiday home? If you don’t submit a tax return you may want to read this:
In the UK over 2.5 million homes are privately rented. HM Revenue & Customs estimate there are up to 1.5million landlords who haven’t paid tax on their rental income. This means up to £500m in tax is being lost. HMRC want this back.
Any person who receives income from anything other than an employed salary should declare their income on a Self-Assessment tax return.
This means if you rent out a property & aren’t filling out a tax return you could be liable to a fine up to 100% of the tax due, as well as interest on the unpaid amounts.
HMRC have been targeting private landlords in recent years and introduced a Let Property Campaign to encourage people to voluntarily declare their untaxed income and pay any tax due, as well as any penalties and interest. The advantage of volunteering rather than waiting for the dreaded letter or knock on the door is that by voluntarily declaring the income you’ll pay any penalties at a preferential rate which will be a lot lower than you’d pay if HMRC came calling. It will also mean avoiding a possible criminal conviction.
Filling in a self-assessment return can be a complicated matter, and it’s important to do it right or there will be more penalties to pay. There are lots of legitimate deductions you can make from your rental income which mean the tax you pay on your rental income is relatively low.
If you want to know more about the Let Property Campaign, or about registering for Self-Assessment and filling in a tax return, get in touch. I’ll be happy to explain what you need to do clearly and simply.
Owner & Director, DMF Accountancy Ltd
07921 331192 / firstname.lastname@example.org