Are you a landlord that owes tax to HMRC

Are you a landlord that owes tax to HMRC. Image Credit: AdobeStock

Property letting: Some good news for landlords who owe tax to HMRC

(Partner Content) The Let Property Campaign allows landlords who have undeclared income to disclose any outstanding liabilities to the tax authority.

Are you a landlord that owes tax to HMRC

Are you a landlord that owes tax to HMRC. Image Credit: AdobeStock

The Let Property Campaign provides landlords who have undeclared income from residential property lettings in the UK or abroad with an opportunity to regularise their affairs by disclosing any outstanding liabilities whether due to misunderstanding the tax rules or because of deliberate tax evasion.

Participation in the campaign is open to all residential property landlords with undisclosed taxes. The campaign is not suitable for those letting out non-residential properties.


Landlords who do not avail of the opportunity and are targeted by HMRC can face penalties of up to 100% of the tax for UK gains and 200% for offshore liabilities together with possible criminal investigation.

READ: 6 Tips for Investing in UK Rental Properties

Taxpayers that come forward will benefit from better terms and lower penalties for making a disclosure. Landlords that make an accurate voluntary disclosure and have taken ‘reasonable care’ are likely to face the lowest penalties. There are higher penalties where you did not take reasonable care if you deliberately misled HMRC regarding offshore liabilities. 

There are three main stages to taking part in the campaign, notifying HMRC that you wish to take part, preparing an actual disclosure and making a formal offer together with payment. The campaign is open to all individual landlords renting out residential property. That includes landlords with multiple properties and single rentals as well as specialist landlords with student or workforce rentals.

Tax avoidance – Spotlights

HMRC Spotlights identify specific tax avoidance schemes of which HMRC have become aware and that they consider are not likely to have the legal effect desired by those thinking of using them. According to HMRC, the Spotlights series is designed to be helpful to taxpayers to help them avoid unwittingly entering into arrangements that HMRC are likely to see as tax avoidance.

READ: Fact check: South Africans can indeed buy property on a mortgage in the UK

In the Spotlights series HMRC:

  • Provides advice on suspect tax planning, listing indicators that HMRC see as suggesting that a scheme may involve tax avoidance and which it is likely to investigate.
  • Identifies specific schemes which, in HMRC’s view, are not likely to deliver the tax savings advertised. Where HMRC see such schemes being used, subject to the particular facts, they will make a challenge and seek to ensure full payment of the right tax with the right due date.

HMRC has recently published a new Spotlight: Spotlight 58 Disguised remuneration: tax avoidance using unfunded pension arrangements.

This spotlight concerns an arrangement used by owner managed companies and their directors. The arrangements are used to reward a director for the services they provide to a company. This is done in a way that seeks to avoid paying Income tax and National Insurance contributions, while obtaining Corporation Tax relief at the same time.

HMRC strongly believes that these arrangements do not achieve the tax savings promised. HMRC will challenge anyone promoting such arrangements and investigate the tax affairs of all users. HMRC is also considering whether the General Anti-Abuse Rule (GAAR) applies to this arrangement and is strongly advising anyone using this or similar schemes to withdraw from them as soon as possible and to settle their tax affairs.

Welcome Back Fund update

In March of this year, the Communities Secretary Robert Jenrick announced a new package of support measures to help high streets and coastal areas across England. The support is being delivered via the new £56 million Welcome Back Fund.

This funding is helping councils boost tourism, improve green spaces and provide more outdoor seating areas, markets and food stall pop-ups – giving people safer options to reunite with friends and relatives.

The funding can also be used by councils to:

  • Boost the look and feel of their high streets by investing in street planting, parks, green spaces and seating areas
  • Run publicity campaigns and prepare to hold events like street markets and festivals to support local businesses
  • Install signage and floor markings to encourage social distancing and safety
  • Improve high streets and town centres by planting flowers or removing graffiti

The original guidance and FAQs on the scheme were published on 16 April 2021. Both the guidance and FAQ’s have now been updated and provide details of the activities that can be supported through the Fund and an overview of how it will be administered.