Landlords reminded of tax responsibilities by HMRC
Published by Daniel Jones
Landlords are in a good position to enjoy the financial rewards of renting out a property, but they must always remember to pay the correct amount of tax on their earnings.
That is the warning from HM Revenue & Customs (HMRC), which has launched a new campaign to encourage landlords to pay up any tax they still owe on rental income. An investigation by HMRC and the Treasury has concluded that landlords across the country underpay tax to the tune of £500 million each year.
Danny Alexander, Chief Secretary to the Treasury, has announced the campaign at the Liberal Democrat conference in Glasgow and said as many as 1.5 million property owners may owe money in the form of tax on rental income.
"Over the last decade, rents have risen twice as fast as wages, stretching family budgets. But some landlords still fail to pay the right tax due on the rents they receive. I'm talking about landlords who own more than one property, who rent to students, people with holiday lets and those who let houses in multiple occupation," Mr Alexander explained.
He added those who fail to take on board the advice and do not pay what they owe the government's coffers will "face the consequences" in due course.
Any landlord who opts not to come forward during the campaign may be liable to criminal proceedings if they are eventually found. HMRC has advised that the penalty will be lower if they come forward now rather than wait for tax inspectors to catch up with them.
Marian Wilson, head of HMRC Campaigns, said it is important to remember not everybody is trying to cheat the system and some individuals may simply have made an honest mistake, while others might not realise they have to pay tax on rental income.
Coming forward and revealing a lack of tax payments should not be a problem and the process of informing HMRC is simple and straightforward, so it need not take a lot of time.
Published on: September 20, 2013
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