Get help with an HMRC investigation into let property income

Have you received a letter from HMRC about income from letting property? Learn what it means, how to respond, and how our Tax Disputes team can help you make a disclosure and avoid penalties.

Letters from HMRC about Let Property income

HMRC has recently written to hundreds of taxpayers, stating it believes you may have undeclared income from letting property. HMRC is actively reviewing property ownership records and comparing these with tenancy deposit scheme registered landlords to identify those who may not have reported their rental income correctly. HMRC’s letter may read:

“We believe that you own property and that you may receive, or have previously received income from letting property. Our records do not show that you have told us about this income.”

This is part of HMRC’s longstanding Let Property campaign, which encourages landlords to voluntarily disclose any previously undeclared rental income. There are significant financial benefits to making a voluntary disclosure to HMRC. There are also severe consequences for those who ought to, and don’t – including formal HMRC investigation, significantly larger financial penalties and in some cases, criminal prosecution.

What should you do next?

• Seek professional advice – Your first response to HMRC is the most important one. Book an appointment with our Tax Disputes team to discuss your specific situation in more detail and understand how they can help you to respond to HMRC correctly.
• Don’t ignore the letter – HMRC won’t go away. Delaying your response or burying your head in the sand could have very negative consequences.
• Gather your records – Regardless of whether you believe your tax affairs are entirely accurate or you suspect a disclosure may be required, a Tax disputes specialist will be able to review your previous filings and help you to ascertain the best course of action.

What is the Let Property Campaign?

In the event that a disclosure is required, you will need to notify HMRC of your intention to make one. Once HMRC has acknowledged your notification, you will have 90 days to pprepare and submit your disclosure. As part of this process, you will need to calculate your liability to tax for all years where HMRC remains in time to recover the unpaid tax. Additionally, you’ll be required to calculate any interest that you owe, and to self-assess a financial penalty. If the tax, interest or penalty figures that you submit are calculated incorrectly, HMRC will not accept your disclosure and may open a more formal investigation.

You may need to disclose if you:

• Rent out a single or multiple residential properties
• Let a room in your home
• Own holiday lets in the UK or abroad
• Have become an accidental landlord
• Inherited a property and now rent it out

Why choose Kreston Reeves?

Our Tax Disputes team has extensive experience helping individuals respond to HMRC investigations. We offer:

• A free, no-obligation consultation to assess your situation
• A bespoke strategy tailored to your circumstances
• Full support throughout the disclosure process, including liaising with HMRC
• Assurance that with our support, you won’t pay any unnecessary tax, interest or penalties.

We understand how stressful these letters can be. We pride ourselves on achieving great results for clients while making the process as painless as possible.

Frequently asked questions we can help you with

• Do I need to disclose income if I only rent occasionally?
• What if I’ve already paid the tax?
• What expenses can I claim against my rental income?
• How many years do I need to include in my disclosure?
• What penalties could I face?

If any of these questions apply to you, or you have any other questions you’d like help with, please contact us today and speak with a member of our Tax disputes team. From there, we can provide further guidance based on your individual circumstances.