Less than 3% of estimated eligible landlords have used HMRC’s Let Property Campaign
Less than 3% of estimated eligible landlords have used HMRC’s Let Property Campaign as taxman sets sights on property taxation.
HMRC’s Let Property Campaign has led to disclosures from less than 3% of its original target, according to new data obtained by our firm through a Freedom of Information request.
In its original announcement for the campaign in 2013, the Government estimated that up to 1.5 million landlords had underpaid or failed to pay up to £500 million in tax between 2009 and 2010.
Those originally targeted included those who own more than one property, specialist landlords who rent to students, people with holiday lets and those who let houses in multiple occupation.
In the five years since the campaign started, 35,099 people have made voluntary disclosures to HMRC, only 2.3% of the individuals originally identified, while of the estimated £500 million in underpaid taxes, the campaign so far has recovered approximately 17.1% (£85 million) of that amount overall.
The freedom of information request also revealed the reasons given for disclosures, with the vast majority being due to either a ‘failure to notify HMRC’ or ‘Taken reasonable care’.
From the outset, the Let Property Campaign was always looking much more widely than just traditional landlords. It also targets those who may have become accidental landlords – such as those with holiday lets or multiple occupations.
The tax system is becoming more complex and the burden is shifting further towards the taxpayer: this inevitably means individual mistakes and misunderstanding can happen. Looking at the data from the FOI, of the large number of tax payers who stated that they had either failed to notify HMRC of their original liabilities or hadn’t taken reasonable care, many would likely have been unaware that they owed anything at all.
According to HMRC’s estimates there are clearly many more landlords who have additional tax to pay, but have yet to come forward. If this is the case, then these people would be well advised to contact the taxman sooner rather than later. HMRC have been tightening the net on non-compliance and there are increasingly few opportunities for taxpayers to mitigate the risk of an investigation. This campaign is one of the few that remains open but, with the Common Reporting Standard online and the Failure to Correct penalty system in place (both of which will affect owners of properties overseas) it is likely to remain that way for only so long.
We are picking up signals from the Treasury that their long-term forecasting for tax revenues shows that some of the biggest money spinners for the last century, including tobacco, alcohol and fuel duty, are due to decline due to changing lifestyle habits.
There seems to be a pattern emerging of HMRC targeting other sources of tax revenues, with property being an asset that they could look to levy additional taxes on. This is already in motion, with a raft of tax changes set to hit second home owners and accidental landlords over the next year or so.
Published 04/04/19 by Roger WarehamJoin the BPA today for as little as £45.00