Ten New Faces at RMT Accountants as Practice Expansion Drive Accelerates
June 1, 2018
Landlords letting out properties to students at the start of the new academic year could be set for a stiff examination themselves under new tax regulations that have just come into force.
HMRC’s new Let Property campaign aims to encourage residential property landlords to come forward and voluntarily disclose any undeclared rental income before the taxman comes looking for it.
As well as targeting landlords letting properties to students and other large groups, the campaign is also focussing on anyone who lets out holiday accommodation or properties for multiple occupation.
It’s the latest stage of HMRC’s continuing drive to maximise the returns it receives from residential landlords, a drive which has had a particular focus on the north east.
A dedicated task force was set up last summer to target the region’s property rental market, while earlier this year, new measures designed to recoup undeclared profits on the sale of second homes were introduced.
HMRC and The Treasury estimate that around 1.5m landlords across the UK might have underpaid or failed to pay what they owe on their income, a shortfall which amounts to around £500m a year.
And Anthony Andreasen, Head of Tax at Gosforth-based RMT Accountants & Business Advisors, is recommending that anyone who thinks they might be targeted by this new campaign should take proactive steps to ensure they have their tax affairs entirely up to date and complete.
Under the new Let Property campaign, an 18 month amnesty has been introduced, meaning those who make a voluntary disclosure are likely to receive a lower penalty compared to those whom HMRC approaches directly.
Anthony Andreasen is now advising local landlords to make sure all their rental records are fully up-to-date, and to carefully consider whether they need to make use of the new amnesty in order to properly organise their tax situations.
He says: “On launching this new campaign, Chief Secretary to the Treasury Danny Alexander advised landlords to ‘pay up or face the consequences.’ It’s extremely clear that HMRC believes there is a lot to be gained from continuing to target the rental property market, and with the number of buy-to-let mortgages beginning to increase again, it’s likely that even more people will be taking on the role of landlord in the next few years.
“All rent received from letting out properties for multiple occupation or for holiday accommodation needs to be declared, regardless of whether you’re making a profit on it, but the taxman only has the information they receive from private landlords to go on, and there is scope for incomplete reporting of the income received.
“HMRC can impose substantial penalties on those that it believes are not telling it the whole story, and their primary message of ‘it’ll be cheaper to come to us before we come to you’ very much holds true, especially as HMRC investigations can cost a great deal in terms of time, money and inconvenience.
“Mistakes and misunderstandings of the rules can clearly happen to anyone, and we would very much advise any residential landlords who think they might be vulnerable to this sort of investigation into their financial affairs to take advantage of the opportunity to proactively put things straight.
RMT provides the full range of financial and business advisory services through its Specialist Tax, Recovery & Insolvency, Corporate Finance and Medical divisions. For more information, please contact Anthony Andreasen 0191 256 9500
June 1, 2018