HMRC Let Property Campaign

[cakebythepound1234]

Has anyone had any experience with the above HMRC campaign? We've been renting our property while abroad out to a relative- we're not making a profit and they are only paying the equivalent of the mortgage each month. Stupidly we didn't think we needed to inform HMRC as we weren't making a profit, but after a chat what a friend last week we realise now that that's not the case. We've spoken to HMRC to declare this and have got an accountant to help us with the self assessment for this last tax year and then to declare the 2 years prior to this. Our accountant is really relaxed about it, says it's a common mistake and that HMRC are not interested in coming down hard on people who make mistakes like this if they come forward. And as we have approached HMRC rather than them finding out another way then the penalties will be less severe. We can afford to pay what we may owe, that's not a problem. But despite knowing al this I still feel really anxious about it all (suffer with anxiety so finding it hard to be rational right now!), so wanted to ask if anyone had any experience with this and what the outcome was?

If you have been transparent and are engaging with HMRC to rectify the mistake, which you have, then you have nothing to worry about.

The HMRC are really chilled. They really don’t care so long as they get their money in the end, there is nothing to worry about.

I've been a chartered accountant in practice for over 30 years, so this kind of thing is my bread and butter day job!

As long as you/your accountant co-operate fully and provide full and complete information, it's likely you'll only have the tax to pay, and automatic interest, but almost certainly no penalties on top.

However, if you start delaying or trying to pull the wool over their eyes with dodgy expenses claims, not declaring other income sources, etc., they can turn nasty pretty quickly and start wanting maximum penalties on top of the tax/interest.

Thank you all. @fromdownwest definitely no chance of us delaying or hiding anything, I just want this declared, paid and all above board ASAP so I can stop worrying about it! The stress is making me ill, which I realise is totally ridiculous but that's anxiety for you.

Sorry, I mean @Kazzyhoward !

sort it out and no worries.

what DOES worry me is what else you don't know. Are you 100% on all the legals about renting the property? Makes no difference that there is a relative as a tenant, apart from even MORE reason to make sure you get it right.

You need to believe your accountant. He is the professional, the expert.

Hi, I have "a friend" who has some experience with the let property campaign.

If you are a landlord making a taxable profit on rented property you have to pay tax on it.

If you make a profit, but the total profit added to your other income means your total income for the year is below your tax free personal allowance you will not have to pay tax.

If your rental profit takes your total income over the tax free allowance you are due to pay tax on the income you received that exceeds your personal allowance.

If you did not make a profit on your rental property you should not be paying tax on it. You only pay tax on profit not losses. Check out allowable expenses - there is guidance on the gov.uk website and you can always call the campaign helpline for clarification. What is allowable can change for different years, for example how much mortgage interest you are able to claim as an expense.

Interest will apply.

Penalties are likely to apply but will be a percentage of the tax you are due to pay. As you are submitting a voluntary disclosure, you - or your accountant--will need to look at the penalty guidance and charge the rate of penalty you think is appropriate. "A genuine mistake" would not be grounds for no penalty.

If you are using an accountant to submit the disclosure, or the initial notification that you intend to submit a disclosure ensure that Hmrc has received authority from you for them to act on your behalf. If they do not have the authority they will not process the disclosure.

You need to believe your accountant. He is the professional, the expert.

As long as he's qualified/regulated. There is no legal protection of the term "accountant" so literally anyone can set up an accountancy practice, even those with no qualification, experience, nor insurance. Always best to check their credentials - the major regulated accountancy bodies have databases of their members that anyone can check online.

As long as your accountant is qualified etc. then you will be fine. Just get him to check all your other UK income etc.

HMRC can be very nice and even helpful. But if you try to do anything but say "Its a fair cop", and provide all the evidence then you will be in trouble. But do the right thing and you should be okay.

I would however get some proper advice about the other legalities of letting your house. Making sure you are doing everything you should as a landlord, and making sure your rights are not being eroded (even though your tenant is a family member).