HMRC Takes Aim At Short-Term Property Letting
HMRC’s latest targeted ‘victims’ are taxpayers claiming Research and Development Tax Relief, individuals exceeding the lifetime limit of the Business Asset Disposal Relief and unsurprisingly those who operate short-term property letting and perhaps not declaring part or all of their ‘gains’.
Recent tax advisers and accountants’ feedback is that HMRC has sent out a wave of ‘one-to-many’ letters to taxpayers.
According to the financial advisers and accountants the letters were sent out by the Revenue in the week beginning February 6th which may have been delayed delivered because of postal workers’ strikes.
HMRC’s letters targeted those short term let landlords advertising on such sites as Airbnb, Vrbo, Booking.com and Holiday Lettings.
A tax advisory service says HMRC’s letter states its records shows that the individual could have undeclared income from short-term property letting so may owe tax which needs to be paid.
The HMRC tells the recipient they must complete within 30 days a ‘certificate of tax position’ and if income should be declared they are pointed to using its Digital Disclosure Service.
Another tax advisory service, says: “You will be in a much better position and get more favourable terms from HMRC if you come forward and disclose before being prompted to do so.
“You start by making a submission to HMRC confirming your intention to disclose. This notification is submitted through HMRC’s Digital Disclosure Service. This will be followed by a letter from HMRC acknowledging your submission and setting a 90-day deadline for you to submit and finalise the disclosure.
“This can be extremely complicated and challenging as HMRC expect you to come forward with a complete and accurate disclosure of under-declared income/gains, associated tax and interest due and also assess the correct level of penalties.”
Lat year In November the Revenue sent out a targeted letter campaign to some PRS landlords operating in the long-term lettings market, saying its records show the recipients may not have declared their full rental income and ‘encouraging’ them to pay up.
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