A recent survey on landlord tax carried out by a local authority indicated that almost half of landlords had not registered for self-assessment. At a time when local authorities are experiencing severe cuts, unpaid tax on this scale, whether intentional or accidental, is attracting attention and calls have been made to the government to tackle tax evasion amongst landlords.

Anyone receiving rental income from at least one residential property is considered to be a landlord and must declare the income on their self-assessment personal tax return.

To give the opportunity to bring their landlord tax affairs up to date, HMRC run the Let Property Campaign. The campaign offers individual landlords who let property in the UK or abroad, the best possible terms on their unpaid tax if they make a voluntary disclosure.

As part of the campaign, HMRC have released a list of examples of common tax errors that landlords make. The list helps clarify circumstances when you will be deemed to be a landlord and face the taxes that come with it.

To take advantage of the disclosure scheme, you must notify HMRC that you wish to take part, you’ll then have 90 days to calculate and pay the tax owed.

The landlord tax scheme is only available to individual landlords renting residential property, it is not available to companies or trusts renting out residential property, or those renting commercial property.

It will include you if you are:

  • Renting out a single property
  • Renting out multiple properties
  • A specialist landlord – student or workforce rentals
  • Renting out a room in a main home for more than the rent a room scheme threshold
  • Living abroad and renting out a property in the UK
  • Living in the UK and renting a property abroad
  • Renting out a holiday home (even if you use it yourself)

If you receive rental income from a residential property and are unsure whether you’re paying the right amount of tax, or you wish to make a disclosure, WMT’s tax specialists can help. Where there is tax to be paid, we can calculate the amount you owe and liaise with HMRC on your behalf.

For help and advice on the taxation of rental income, contact WMT’s Paula Jeffs or Anne-Maree Dunn.