Business News - April 2008

Local Accountants Advise Landlords to Speak Up

Local accountancy firm Fish Partnership are stressing to local property owners the importance of notifying HMRC of any income they may have generated by renting out their properties.

This comes after announcements that HMRC have issued over 500 letters to UK taxpayers that they suspect are escaping taxation on property that they let out. The reporting requirement applies even if a loss has been made on the property, for example, where mortgage payments have exceeded the income earned.

HMRC have cross-referenced data from letting agencies with stamp duty records to compile a database that is split into two categories of property owner. The first includes property owners that have informed HMRC that they own more than one property, but have not disclosed any income from it. The second shows individuals with no tax record but an indication of property letting activity.

If a taxpayer has advised an agent to act on his or her behalf, a copy of the letter will be sent to both the agent and the taxpayer.

Martin Sheehy, partner at Fish Partnership elaborates: “HMRC have issued these letters as the initial stage of what they are calling their ‘Property Campaign’. Their intention is to trawl through data from the last 6 years to recover unpaid revenue.

“The campaign is to be rolled out in stages, with these letters representing the initial stage. Early disclosure is highly recommended, and may even encourage reduced penalties from HMRC. The alternative is possible criminal prosecution.”

For more information please contact Fish Partnership on 01628 527956.

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