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Own a Buy to Let? Then read on...
If you own a property which is let out, HMRC may contact you with a "nudge letter'', if they believe you have not declared the full rental income on your Tax Returns.
These "nudge" letters are widely targeted at individuals or businesses based on information received, primarily from the tenancy deposit scheme. The tenancy deposit scheme enables Landlords in England to take a maximum of five weeks’ deposit for new and renewed tenancies, where rent is under £50,000 pa or six weeks if rent is over this amount. As most landlords take the maximum deposit, it is not difficult for HMRC to calculate the expected rental income, which should be included in a tax return.
These latest nudge letters are likely to suggest that the landlord review their tax position, and include a simple certificate of tax position to be completed and returned.
Whilst there is no obligation to respond or to sign the certificate of tax position, we recommend that Landlords review their tax position if such a letter is received to identify if any disclosures are needed. If they are ignored and it is later found that tax is due, it may lead to an investigation and potentially a criminal prosecution. We would also suggest that you contact a professional to review the certificate if there is any doubt about the information you are providing in advance of it being sent to HMRC.
Get in touch today on 0121 667 3882, or email our Business Development Manager at charlie.sangha@informaccounting.co.uk.
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