HM Revenue and Customs (HMRC) continues to increase its focus on undeclared income tax from buy-to-let landlords, with an 83% rise in cases during the 2022/23 tax year.

The Let Property Campaign was launched in September 2013 and it was originally estimated that up to 1.5 million landlords were undeclaring rental income of circa £500m per annum. 

The intention was for the scheme to run for only 18 months, however it has remained open for almost a decade now. In the 2022/23 tax year, HMRC discovered another 5,429 landlords had failed to declare all their rental income in Self Assessment Tax Returns, which resulted in an additional £33m in undeclared income tax being reclaimed (an average of £6,078 per landlord). That’s a 73% year-on-year rise of £19.3m compared to the 2021/22 tax year. 

There is a renewed focus of its Let Property campaign, now that the worst of the Covid-19 pandemic appears to be over,.

How does the Let Property campaign work? 

The Let Property Campaign is an opportunity for landlords who owe tax through letting out residential property, in the UK or abroad, to get up to date with their tax affairs in a simple, straightforward way and take advantage of the best possible terms. 

HMRC is permitted to reclaim up to 20 years of undeclared rental income and issue fines of up to 100% of the outstanding tax (up to 200% for offshore irregularities), in certain cases. HMRC is also within its rights to file for criminal prosecution, should it deem necessary. 

Those found to have deliberately evaded paying income tax on their rental income will receive the harshest of penalties whereas landlords who are deemed to have made genuine errors with their accounting are given more lenient fines and HMRC will only reclaim up to six years of undeclared income tax in less serious cases. 

Once a disclosure has been made, you’ll receive a 90-day window to calculate the undeclared income and pay what you owe.

Simpson Wood can help keep your property tax affairs in order

If you believe you have rental income that’s undeclared to HMRC, you should act immediately! It is better to voluntarily disclose this information to HMRC rather than wait and be caught.

Our tax team can help you with your Let Property Campaign disclosure and calculate what is owed.

We can also help ensure you remain compliant and are maximising claims for reliefs and expenses you’re entitled to, so that you pay the correct amount of tax.  

Please contact a member of our tax team today on 01484 534431 or send an email to enquiries@simpson-wood.co.uk