NewsBuy to let tax disclosures drop

Buy to let tax disclosures drop, HMRC reveals

Thousands of landlords have failed to come clean about the tax they owed to HMRC as 42% fewer property investors voluntarily disclosed unpaid tax to HMRC in the latest tax year

 

The tax yield from the Let Property Campaign, which launched in 2013, dropped almost 50% from around £34m in 2019-20 to around £17m in 2020-21, with the numbers of those disclosing falling from 7,578 to 4,330.

This was the lowest figure recorded in seven years, according to figures obtained under the Freedom of Information (FOI).

The figures released by the tax authority also showed the number of penalty notices HMRC issued to buy-to-let landlords. In 2019-20 HMRC issued 8,116 penalty notices worth out £5.5m and in 2020-21 this dropped to 4,297 notices worth £2.3m.

In the tax year 2019-20 HMRC issued 408 notices for landlords who were considered to have not taken reasonable care and in in 2021 the number of notices dropped to 364. There were 5,578 notices for those who failed to notify HMRC in 2019-20 and only 3,348 in 2021 and there were 134 notices issued for those who deliberately misled HMRC, this figure dropped to 58 in 2020-21.

HMRC also issued penalties for those who were considered to have taken reasonable care which means that the individual has made an error but has taken reasonable care. In 2019-20 there was 1,952 of these issued compared to 509 in 2020-21.

An HMRC spokesperson said: ‘HMRC believes that its customers want to pay the right amount of tax and wants to help those that are not paying the correct amount to put that right.

What is ‘The Let Property Campaign’?

‘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.

‘If you’re a landlord and you’ve undisclosed income you must tell HMRC about any unpaid tax and you’ll then have 90 days to calculate and pay what you owe.’

The campaign gave landlords who owe tax the opportunity to come forward voluntarily to put their tax affairs in order and was aimed at those who own more than one property, landlords renting to students, people with holiday lets, and those who let multiple occupancy homes.

When the campaign launched, the government estimated that up to 1.5m landlords had underpaid or failed to pay up to £500m in tax between 2009 and 2010. The government said at the time that if landlords did not come forward voluntarily and HMRC found them first, they could face bigger penalties.

‘HMRC’s use of technology to home in on suspected unpaid tax is only going to increase, with data and information availability improving all the time, and the direction of travel is likely to be an ever greater expectation, even demand, for tax to be paid in real time’

Why accurate record keeping is essential for landlords ?

‘Accurate record keeping is essential, as is planning ahead for the cashflow implications of real time payments. Landlords should start making plans now as to how they intend to manage the requirements of Making Tax Digital to ensure the switchover is as seamless as possible and to avoid the ire of HMRC.’

Since opening the campaign has received 58,779 voluntary disclosures, around 4% of the landlords originally targeted.

However, with a tax yield of almost £190m HMRC has only secured 37% of its original target.

Buy to let tax disclosures drop
Buy to let tax disclosures drop

Our service to you

If you are a self employed, business owner/director of company looking to get your accountancy and taxation matters sorted, look no further. We, at Naail & Co, are pro-active and easily accessible accountants and tax advisors, who will not only ensure that all your filing obligations are up to date with Companies House and HMRC, but also you do not pay a penny more in taxes than you have to. We work on a fixed fee basis and provide same day response to all your phone and email enquiries. We will also allocate a designated accounts manager who would have better understanding of your and business financial and taxation affairs. Book a free consultation call using the link below.

Related pages:

Get further information from the following pages;

Explore our services

Knowledge & resources

Tax rates card

Budget

Tax tables

Who we help?

Related Blogs:

Get further information from the following blogs;

Blogs

News & recent developments

Like this page? Share it with your friends
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on google
Google+
Share on whatsapp
WhatsApp
Share on email
Email
Share on print
Print

Get in touch

Book a free call at time of your convenience

Subscribe to our newsletter

Install Naail & Co app

Install Naail & Co App on your Smartphone or Tablet. Tax calculators, business mileage tracker, deadlines & thresholds, business & tax news and much more!

Leave a Reply

Your email address will not be published. Required fields are marked *

Post comment