Let Property Campaign

What is a Let Property Campaign?

HMRC’s Let Property Campaign disclosure was introduced in Autumn 2013. It is a method for UK landlords and property investors to declare undisclosed income to HMRC and pay any tax on their investments.

Launched in September of that year, the nationwide campaign was targeted at residential property landlords who were not declaring their rental income.

There were significant property tax revenues to pursue from these one million ‘missing’ landlords.

The Let Property Campaign was introduced to run for an initial 18 months. It was still in effect in 2021.

It’s advisable for any UK landlords or property investors who are behind in their tax affairs to read the HMRC Let Property Campaign guide in full to see how they can make a disclosure and reduce penalities.

Our let property campaign accountants for property investors have helped hundreds of people complete their let property campaign disclosures to HMRC. Could we help you?

Why should I use the Let Property Campaign disclosure?

The Let Property Campaign presents an opportunity for residential property landlords in the UK to get up-to-date with their tax affairs, taking advantage of the best possible terms from HMRC.

HMRC allows for full disclosure from landlords and property investors, with 90 days to work out and pay any tax owed.

HMRC often examines property transactions to check that taxpayers declare the correct amount of income and gains.

Whilst the campaign focuses on undisclosed rental income, HMRC issued nudge letters in late 2020 to indicate that some people could need to tell HMRC about gains from property sales.

Since being launched in 2013, property industry sources claim that the Let Property Campaign disclosure has clawed back more than a quarter of a billion pounds in taxes from UK landlords and property investors for HMRC.

Whether the current voluntary system will be replaced by a more direct approach by HMRC to tracking down private residential landlords who fail to declare rental income has also been questioned.

Read this guide from HMRC to find out how to use the Let Property Campaign.

If you’re unsure how to get your property taxes in order, speak to one of our let property campaign accountants today.

What are the basics of HMRC's Let Property Campaign disclosure?

As let property campaign accountants serving thousands of UK landlords who purchase buy to let properties, we know that tax-efficient is of prime concern to our property investor clients.

For those landlords who are not up-to-date with their property tax affairs, the Let Property Campaign is a long-running disclosure opportunity from HMRC that allows individuals to disclose undeclared income from previous tax years in a straightforward way.

HMRC receives data from various sources about rental properties, including letting agents, land Registry, Council records, mortgage applications and tip-offs from members of the public.

HMRC can analyse data from different sources and flag up taxpayers who do not appear to be paying the correct amount of tax.

This can lead to a nudge letter from HMRC to landlords and property investors, inviting them to use the Let Property Campaign to get their tax matters in order.

HMRC property let scheme is open to a range of residential property landlords, including
* landlords with one or more rental properties
* landlords renting rooms in their primary home using the Rent A Room Scheme
* landlords who specialise in property lets for students and workforces
* landlords with holiday lettings

Landlords who think they have underpaid tax should contact HMRC through the Let Property Campaign disclosure as soon as possible.
Once a landlord has notified HMRC that they wish to be involved in the scheme, they are required to disclose to HMRC any income, tax, gains and duties they’ve not previously disclosed.

Landlords are then required to make HMRC a formal offer and pay what they owe.

HMRC give landlords the best possible terms under the Let Property Campaign, with lower let property campaign penalties available to those who provide the most accurate and prompt information.

How does the HMRC property let scheme work? 

HMRC property let scheme is relatively straightforward for landlords and property investors to use.

The following steps need to be taken:

– HMRC will issue a Payment Reference Number once you have advised them you wish to use the Let Property Campaign disclosure.
– All previously undeclared income and gains must be included in your disclosure, such as business profits and investment income as well as rental income and gains.
– Calculation of the additional tax, interest and penalty due for each tax year covered by the disclosure
– You must pay HMRC the amount offered using your Payment Reference Number
– Once your disclosure has been submitted, the HMRC will issue an acknowledgement letter within a fortnight. They will carry out further internal checks and issue a formal acceptance letter if satisfied that full disclosure has been made
– You must ensure moving forward that you are compliant with current and future tax affairs by registering for Self-Assessment and declaring all income and gains via your annual tax return

There are technical rules to be aware of and potential arguments to try and utilise to restrict the number of years to include and minimalise let property campaign penalties from HMRC.

We recommend that you speak to an experienced property tax accountant before disclosure.

Will I pay less tax by using HMRC property let? Maybe, maybe not says our specialist property accountants

It is unlikely that less tax will be paid using the Let Property Campaign disclosure.

There is still a significant benefit in using the let property campaign disclosure scheme instead being investigated by HMRC

It is unusual for the scheme office to request invoices and receipts for expenses. They do allow a degree of estimation where information cannot be obtained.

Under an investigation, the requests for information and paperwork are far more stringent and take longer to complete. This means that you would likely pay far more in professional tax advisor fees.

It is also possible to reduce potential let property campaign penalties by approaching HMRC before they contact you.

Good property tax advisors will help landlords and property investors minimise HMRC penalties of non-disclosure of their rental income.

Does HMRC contact landlords about the Let Property Campaign disclosure?

HMRC targets tax compliance activity across all UK landlord types.

They will identify and write to landlords and property investors who they consider not declared all their rental income.

If HMRC then has to carry out compliance checks or enquiries to resolve matters, you will not be able to use the Let Property Campaign disclosure.

Voluntary disclosure is recommended to resolve let property campaign penalties and resolve matters. This can also help convince HMRC that simple mistakes or errors have been made rather than more severe issues.

During a single Summer, HMRC sent tens of thousands of letters to landlords suspected of avoiding or underpaying tax under the banner of the Let Property Campaign.

The majority of those targeted were landlords with one or two properties to let.

These letters gave the landlords a 30-day period to contact HMRC and then 90 days to repay the outstanding tax.

By utilising the Let Property Campaign, these landlords were informed they could gain favourable terms, while those who didn’t would face investigation, higher let property campaign penalties and the prospect of a criminal conviction.

Our let property campaign accountants help many landlords who face an HMRC investigation. Let us take away the stress of going through a tax enquiry.

Where does HMRC get information from about let property? 

HMRC has broad information powers to obtain details about let property in the UK, including:

* Council, for landlords providing accommodation to housing benefit claimants

* the land Registry for details of who holds the legal ownership of a property

* HMRC also has powers to gain information from third parties such as letting agents, anyone who searches for tenants, and internet-based letting services

HMRC has also developed in recent years systems to manage and analyse data, ensuring they have access to large lists of persons in receipt of rental income.