What is a common tax case for let property?
Mainly people who have rented out a house (maybe one they used to live in) or have acquired from a relative in a will or something and started renting it out.
Time drags on and before you know it you’ve missed the 5th of April one year and then the longer it goes on the more difficult it is to come clean. People are scared to have to admit it and so time just flies and a few years can have elapsed and then you realize you should have declared it but it’s too late! Or is it!! I can help!
How do HMRC find out and what do they know?
Well I’ve been in this job representing clients and defending them against such matters for around 25 years since leaving HMRC and only recently have HMRC really got their act together and become fully integrated with the internet etc.
They are being extremely savvy and successful at targeting people like landlords through their system called “Connect” so that literally at a press of a button, they’ll sweep all online sources and find out everything about you that’s in the public domain and so create a massive picture of who you are and what you do.
The main sources of that information for landlords and property owners is the land registry, letting agents’ returns, electoral rolls, Zoopla and council tax records. It will pull up immediately any property that you’ve ever owned or sold with your name on it.
What other information do they know?
Equifax and Experian Credit Agencies are the big ones and from that they’ll know for example all about your mortgages and loans, if you’ve had a mortgage to buy one of these properties and also if you can afford it.
I only had a call today where quite clearly it seemed strange that on the person’s known income, they could afford an £700,000 house so it is all revealed online.
Then they look at your mortgage application and whether you could afford to buy it or fund the property and how you obtained it. Woe betide anyone who has falsified their mortgage applications by enhancing income by using false PAYE or accounting documents as HMRC view anyone doing so to also be likely to falsify their tax affairs too.
The only good point is that if your annual gross property income is £1,000 or less, from one or more property you will not have to tell HMRC or declare this income on a tax return, but you will need good records to prove this.
Is let properties investigated by HMRC?
Yes! it is easy pickings for them- it is all there in black and white!
There’s hardly a day goes by when I don’t get a phone call from someone who’s had a letter on the mat about it, but instead of responding to that letter you can get your foot in the door literally with the Revenue first through something called the Let Property Campaign and make a voluntary disclosure of everything though this system.
HM Revenue & Customs have had this property campaign available to people for many years and there is still no sign of it shutting down, because to be honest, it’s a big earner for the Revenue for very little work on their part.
It is often referred to as an ‘amnesty’ so you’re not going to get away with paying a lot less tax but you will pay a lot less in penalty charges and undergo a lot less time and stress in the process
Can you tell us more about Let Property Campaign?
What it is, is an online system where through someone like myself, you make a complete and correct declaration of all your omitted rents.
I work out the tax the interest and the penalties and we file it online. Then you pay the amount due or ask for ‘time to pay’ over a period agreed with HMRC.
All of the ones I’ve ever done have been accepted literally without any alteration by HMRC but that’s because I do a lot of deep research before filling those forms and the time involved is all about gathering the information, leaving no stone unturned, to make sure that when it goes in it is right.
How do I get in touch with Lindsay?
Call or email me in absolute confidence and I’ll give advice over the phone to put minds at rest or I’ll deal with it for anyone – they shouldn’t be frightened to ring me as I’m very approachable and easy to talk to as you can see from my videos – what you see is what you get!