HMRC may be readying for a campaign against landlords after issuing a warning about tax avoidance.
As the January 31 deadline for self-assessment filing nears, the tax authority is urging landlords to catch up with their financial affairs if they have undeclared rental profit from earlier years.
Landlords who have disposed of letting property are also reminded that they should have filed a capital gains tax return to report any profits on the sale.
Both warnings come under a reminder that the Let Property Campaign is still running for buy to let and shared house landlords.
HMRC generally flags a crackdown against specific taxpayers is on the way with reminders like this in the media.
“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,” says the HMRC web site.
“If you’re a landlord and you’ve undisclosed income you must tell HMRC about any unpaid tax now. You’ll then have 90 days to calculate and pay what you owe.”
HMRC also explained that the campaign has no closing window, but landlords who do not take advantage of the terms may face much higher penalties.
This could be up to double that tax owed.
“Regardless of whether the errors were due to misunderstanding the rules or deliberately avoiding paying the right amount it is better to come to HMRC and admit any inaccuracies rather than wait until HMRC uncovers those errors,” says HMRC.
“You may not have to pay any penalty at all but if you do it is likely to be lower than it would be if HMRC finds out you haven’t paid enough tax.”