Renting out land or property and how HMRC become aware of it!

Are you renting out a property that is not your main home.

There are various circumstances that give rise to clients becoming landlords sometimes unexpectedly.

Maybe you have inherited a property and decided not to sell it straight away or been unable to sell it straight away. Maybe you have gone to live with a partner and one of you has rented out a previous home. ‘Accidental’ landlords still fall into the same category as those buying property to rent out.

These taxable circumstances could include letting rooms in your main home, including as a bed and breakfast (and there are specific circumstances to cover people having lodger) a property that is not your main home – and land, for example your driveway, in places where parking can be at premium, or for grazing.

Clearly using any online platforms to rent out rooms or property or land is likely to come to HMRC’s attention very promptly now.

If you are unfortunate enough to receive an HMRC tax enquiry as a landlord it is very stressful and involves a thorough review of the rental income, your bank accounts, receipts for any expenses claimed, which regularly  leads to penalties and/or demands for unpaid tax going back up to 20 years if undeclared.

The new HMRC rules for landlords also require digital record-keeping, quarterly digital returns of income to update HMRC under the Making Tax Digital system (MTD)

A more speedy way of relieving the pressure is by putting it in the hands of a professional, who can agree with you the correct level of profit taxable and deal with HMRC for you, by making an online voluntary disclosure through the Let Property Campaign. This allows more leeway with regards to the penalties and is something we can do normally quite quickly for you. Call us for a fixed fee and to discuss the years and amounts involved and to put you at ease.

Call Andy on 07879 464577

Alex on 07538 418839

Lindsay on 07584 706664

Or email her on Lindsay@lhtax.co.uk