Throughout July and August 2018 HMRC sent the huge batch of ‘Let Property Campaign’ letters to landlords and other buy-to-let investors with undeclared rental income. This wave of letters largely targets accidental landlords with 1 or two rental properties.
The ‘prompted letter’ provides landlords a 30 day window to make contact, and then a further three months to regularise their tax affairs. Those who do not take this opportunity risk being investigated under Code of Practice 8/9, face much higher penalties and the possibility of a criminal prosecution.
Let Property Campaign
The Let Property Campaign, launched in 2013, prompts landlords with undisclosed rental income to come forward and regularise their tax affairs.
Figures released by HMRC in 2017 show the Let Property Campaign has generated more than £135 million in unpaid tax, penalties and interest.
Sources of Information
HMRC rely on a wealth of available information to identify landlords who have not declared rental income.
HMRC’s state-of-the-art analytical computer system ‘Connect‘ draws on information from a range of government and corporate sources, including HM Land Registry and the Tenancy Deposit Scheme, to create a profile of each taxpayer’s total income.
Letting agents have also been sent statutory notices demanding details of rents collected on behalf of private landlords. An initial fine of £300 applies to those agents failing to meet the initial deadline, with a potential further fine of £60 per day for ongoing failure.
