Since the Let Property Campaign was launched in 2013, there have been more than 13,000 disclosures from buy-to-let landlords.
The Let Property Campaign was launched by the HMRC to assist landlords in paying the correct amount of tax. It offers an opportunity for landlords owing tax through letting out properties to get up to date with their arrears.
To date, the tax campaign has raked in £50m in unpaid tax, with HMRC believing that most investors failing to declare their earnings owe just a few hundred pounds in tax each year.
Many investors owing tax are thought to be smaller scale or amateur landlords, or so-called accidental landlords letting out a home they are unable to sell.
HMRC is urging people to come forward, stating that the Campaign will give those in arrears the chance to take advantage of the best possible terms.
‘If you make a full and voluntary disclosure of all unpaid liabilities in these circumstances you can usually expect a lower penalty than HMRC would otherwise seek if they raised an enquiry or compliance check without the disclosure,’ they continued.
There are growing concerns that professional landlords are using Airbnb and other home sharing websites to not pay their taxes. Under current tax rules, one is legally permitted to earn £7,500 before tax is permitted to be paid.
However, reports are suggesting that a rising number of landlords are using the service in order to let their properties, as they can earn more money than through traditional rents. In addition, they are letting their rooms for more than 90 days a year, in breach of housing regulations.
A further issue is that leaseholders are letting on Airbnb. Recently the Land Chamber ruled that a leasehold flat owner has broken the law by letting out her property in breach of her lease, which stated the apartment was a ‘private residence.’
‘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,’ the spokesperson continued.
They added that any amount due would depend on why a person failed to dispose their income. As such, someone who has purposely kept information from HMRC will pay a greater penalty than if they have made a mistake.
Concluding, the spokesperson said: ‘This is an opportunity to stop worrying about what might happen, have certainty about what you owe and get things right for the future.’