Landlords urged to disclose rental income to HMRC
It may have seemed like a good investment, but residential landlords who haven't declared their rental income could be in for a nasty New Year's surprise.
HMRC are cracking down on those who don't pay income tax on their rental income and they could face a hefty bill and penalty for tax evasion.
ASM Chartered Accountants said landlords need to work out exactly how much they should be paying and avoid any penalties.
ASM tax director Caroline Keenan said: "There are many reasons why landlords may misunderstand the rules and so not pay the right amount of tax, but instead of waiting for HMRC to uncover any tax evasion, we would recommend buy-to-let residential landlords should review their affairs, and if applicable, consider coming forward by making a voluntary disclosure."
The 'Let Property Campaign' will offer reduced penalties to those who set their tax affairs in order now, while those who are later found to have underpaid their tax could face criminal prosecution. The Treasury estimates that as many as 1.5 million landlords may not have paid what they owe.
The campaign is the latest in a string of amnesties launched by the Revenue. Since 2007 these campaigns have collected more than £800m, of which £552m was recovered from individuals approaching HMRC.