The Let Property Campaign: What Landlords Need to Know in 2019

You will have probably heard of the Let Property Campaign, but may be in doubt as to whether it applies to you. 

The Let Property Campaignby HM Revenue & Customs (HMRC) provides property landlords who haven’t disclosed the money they make from rentals with an opportunity to get their tax up to date, without incurring a penalty.

Although the Let Property Campaign began in 2013 and was originally set to run for just 18 months, it is showing no signs of stopping in 2019, due to its huge success. 

The campaign was started to help landlords who let residential property in the UK or abroad and haven’t declared their income, so still owe HMRC tax. The Let Property Campaign assists landlords, providing an opportunity to declare the rental income and pay what they owe. 

The incentive for doing so includes peace of mind in settling the matter, with the bonus of a financial advantage. As a landlord disclosing the rental income, you will be rewarded by getting your tax in order quickly and simply – and you won’t incur a severe penalty.

Can I benefit from it? 

All rental income needs to be declared – whether you are making a profit or not. To do this, you will have needed to register and declare the profit or loss on your tax return. 

There are many reasons why rental income may not have been declared. Often, the expenses and mortgage payments on the property are higher than the rental income collected, so landlords don’t consider it to be a profit. In fact, you only get tax relief for the mortgage interest – not the capital repayment.

If you are a landlord with undeclared rental income, you will eventually receive a letter about it from HMRC, so it makes sense to get ahead and use the Let Property Campaign. 

You can benefit from this campaign if you:

✔are renting out one single property

✔are renting out multiple properties

✔rent out a holiday home – even if you use it yourself

✔let to professionals or students 

✔rent out a property in the UK, but live abroad for more than six months of the year

✔are renting out a single room in your home, with earnings over the threshold of the Rent a Room Scheme

Unfortunately, if you are a trust or company renting out a residential property, then you can’t take advantage of this scheme.

If you still need to clarity, as you are unsure as to whether or not you can benefit from the campaign, then you can simply fill out the HMRC Let Property Questionnaire.

Quite often, the lack of tax payment is simply due to the landlord’s misunderstanding or a mistake and so, this, coupled with being proactive in seizing the opportunity provided by this campaign, means that HMRC will consider your application favourably. The key here is that your honesty will be rewarded.

If there is a serious case of deliberate tax evasion, HMRC can uncover and investigate up to 20 years of undisclosed taxes. In this case, you would need to be represented by an industry expert, who could support you with the proceedings. 

How does the Let Property Campaign work?

There are just four easy steps:

1. Tell HMRC that you want to use the Let Property Campaign

2. Tell HMRC all the financial information relating to the rental, including the income, any gains, tax and duties

3. Inform HMRC of your formal offer, which should total the sum of what you owe

4. Pay HMRC what you owe and don’t forget your tax payments going forward

HMRC will often agree to spread the cost of the payments if you can’t afford to pay the tax back all in one go.

Ideally, appoint an accountant to help guide you through the process smoothly. In fact, although you have to have undisclosed rental income to benefit from this scheme, you can also disclose any other income that HMRC was not aware of at the same time, such as income from being self-employed. In this way, you can sort out all your tax administration at once and correct any other mistakes.

The Let Property Campaign has not been given an end date, so it looks like it is going to be around for quite some time. However, the sooner you put your tax affairs in order, the better.

HMRC has the power to find out about undisclosed tax through letting agents and local authorities, and, once they have this information, they then write to the landlords asking them to take part in the Let Property Campaign. However, it is a good idea to take advantage of the scheme in 2019 – before you receive a letter – as it is a straightforward process, and HMRC will be supportive and helpful, especially when you have been proactive.