Landlords that rent out residential property, and fail to inform HM Revenue and Customs (HMRC) of their rental income, are being given the opportunity to come forward and set their tax affairs straight with the authority, before HMRC comes to them.
HMRC states that up to 1.5 million landlords across the UK may be underpaying as much as £500 million in tax each year.
As part of HMRC’s new Let Property campaign, landlords who realise they owe tax - whether through misunderstanding the rules or deliberate evasion – can step forward and let the tax authority know about any unpaid tax on rents and pay what they owe without incurring any additional penalties or interest.
The campaign is open to all residential property landlords - from those that have multiple properties to single rentals - and is one of a number of reviews and probes into a multitude of industries and sectors.
HMRC has reiterated it will be working closely with a number of bodies in the coming months to develop tools and guidance to assist residential landlords to help them get their affairs up-to-date.
Marian Wilson, head of HMRC Campaigns, said: “All rent from letting out a residential property or holiday home has to be declared for income tax purposes. Telling us is simple and straightforward.
“We appreciate some people will have made honest mistakes, and some may not be fully aware that the rent from a property is taxable, and that is why it always makes sense to talk to us so we can help. It is always cheaper to come forward voluntarily and pay the tax you owe, rather than wait for HMRC to come calling.
“Telling HMRC about your tax liabilities is simple and straightforward, and help, advice and support are available. The message for all landlords owing tax is simple – it is better to come to us before we come to you.”