Over the last 6-12 months I have realised that due to lockdown more landlords have realised that they are receiving their property income and that they should be telling HMRC about it as it is taxable. I find most of these landlords are busy employed professionals and have been paying their tax through their PAYE, so did not even think about the tax aspects of renting out a property.
As a landlord you must declare your rental income to HMRC, regardless of whether you have made a profit or a loss. Some people assume this is done by people they employ such as the mortgage company or letting agent, but they will not do this! It is your responsibility to tell HMRC about the income.
What I have noticed is that when these landlords have this realisation the first thing, they do is register with HMRC for Self-assessment; currently the 19/20 tax year. HMRC are flagging that people are doing this and think why they have not submitted previous returns. They then check their systems are realise they have no other information regarding the property income. Instead of putting the landlords through the let property campaign for the previous years, they are raising a tax enquiry which is more concerning! It also means the landlords are missing out on the lower penalty rates of the let property campaign. The tax enquiries also give you less time to respond as you have 30 days compared to the 90 of the let property campaign and they also require a lot more detail!
I would highly recommend that if you are going to come clean regarding your property income to do this via HMRC’s let property campaign as soon as possible!
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