HMRC is continuing its clampdown on the rental property sector, with a new focus on digital platforms for holiday lets such as AirBnB and Booking.com.
HMRC has obtained data from online providers of short term lets sand are now writing to those it believes may have a disclosure to make (i.e. individuals it believes to have failed to report their rental income).
If an individual receives a letter of this kind, the position will need to be fully reviewed before responding to HMRC and specialist advice should be sought if one of these letters is received.
What action should be taken?
If you receive one of these letters from HMRC, you should take professional advice about the best approach to take when responding. For example, these letters contain a Certificate of Tax Position which are made to appear like they are compulsory, but it’s important to note that there’s no statutory requirement to complete a Certificate of Tax Position and doing so may potentially create some problems if an incorrect declaration is made in the certificate.
You should then look to make a disclosure to HMRC to get your tax affairs up to date,
Even if you have not received a letter, but believe you have rental income to report to HMRC, you should do so immediately by way of a voluntary disclosure, as going to HMRC voluntarily before they contact you will reduce the level of penalties that HMRC can charge.
How can we help?
We have dealt with a number of these cases and are well positioned to advise and get your tax affairs up-to-date and we can:
Undertake a review of your tax affairs to identify any issues that need to be disclosed, if any
Register you for the most appropriate HMRC disclosure facility
Prepare and submit a disclosure (either voluntary or otherwise) that minimises your exposure to unnecessary tax, interest and penalties
Negotiate your tax and penalty position with HMRC and act as a liaison accordingly
Contact Us
Please contact us to find out how the above applies in your circumstances and how you can reduce your tax liabilities and maximise your tax efficiency.
Please note that the above is for general information only and does not constitute financial or tax advice. You should not rely on this information to make or refrain from making any decisions. You should always obtain independent professional advice in respect of your own situation.
