HMRC’s Let Property Campaign- What is it?

HMRC’s let Property Campaign (LPC) has recently been in the spotlight with a number of individuals receiving correspondence from HMRC in the form of “one to many” or “nudge” letters.

The LPC is designed for HMRC to raise awareness and collected taxes from those who own rental properties. The campaign was first introduced in 2013 however HMRC recently appear to be ramping up their efforts by sending more letters out to those they suspect of receiving rental income rather than assuming they will come forward on their own volition.

Since the campaign was started it has raised over £370 million for HMRC (including over £80 million in penalties and interest alone).

Why does it matter?

Many people who own rental properties have owned the properties for a number of years. Where an individual has not been filing a tax return during this period, HMRC is able to go back up to 20 years to collect tax, interest and penalties. Unfortunately, this can create a significant tax liability for those who were not aware of their responsibility to report this income to HMRC.

While the tax bill is significant, the total cost can be reduced by making a disclosure to HMRC before they contact you, this is due to the way in which penalties for this kind of mistake are calculated. Penalties are calculated based on behaviour and whether the disclosure is prompted (i.e. HMRC contacted you first) or unprompted (where you come forward without receiving any correspondence from HMRC).

The minimum penalty that can be charged for a prompted disclosure is 15% whereas for an unprompted disclosure the penalty can be as low as 0%.

How can Ad Valorem help?

The team at Ad Valorem have a great deal of experience in dealing with HMRC’s Let Property Campaign and will ensure that you feel supported throughout the process of corresponding with HMRC. We will strive to put your best possible case forward in order to mitigate any penalties from HMRC.

Should you require any support from us regarding HMRC’s LPC, please contact us:

(E) enquiries@advaloremgroup.uk (T) 01908 219100 (W) advaloremgroup.uk