1. Services

Let Property Campaign

HMRC's Let Property Campaign (LPC) is designed to help landlords rectify any historic tax irregularities associated with their rental profits.

The LPC allows landlords to disclose any unpaid tax under settlement terms that are often more advantageous than if the irregularities were discovered through an HMRC investigation. As a result, HMRC often only charges a minimum financial penalty when an LPC disclosure is accurate and complete.

Is the LPC available to everyone?

It is possible for a wide variety of residential property landlords to disclose under the LPC, such as:

• Landlords who rent out one or more properties in the UK
• Those who live abroad and rent out property in the UK
• Those who live in the UK and rent out their properties abroad
• Those who rent out a room in their main residence
• Specialized landlords who rent out properties to students
• Owners of holiday homes who rent them out

What is the minimum period of time landlords must disclose?

There are several factors that will determine the number of assessable tax years. Bolton Tax Accountants will be able to provide bespoke advice that is specific to your case, it will always be necessary to consider the behaviour that led to irregularities in your tax affairs and whether you were registered for Self-Assembly in the relevant tax year.

The time limits set out in legislation restrict HMRC's ability to raise assessments. If HMRC is still able to collect tax liabilities (as defined by law), you must present all of them in your disclosure. There may be as many as 20 years or as few as four tax years. It is likely that HMRC will open an investigation and seek to recover additional tax and higher penalties if an LPC disclosure does not present all the assessable tax liabilities.

Does HMRC have access to rental income?

Rental property data is collected by HMRC from a number of different sources. They include letting agents, government agencies, local councils, banks, and even anonymous tips from the general public. Using this information, HMRC can determine if you have an unpaid tax liability. If HMRC suspects that rental income was under-declared, it will write to you inviting you to make a disclosure under the LPC.

HMRC may send you a nudge letter. What should you do?

Please do not ignore the letter. Despite sometimes being unfounded, HMRC doesn't send these 'nudge letters' unless it believes your UK tax affairs are irregular. It is strongly recommended that you consult a specialist tax adviser even if you believe you have fully complied with your tax obligations.

A comprehensive rental income review service is offered by Bolton Tax Accountants. By doing so, we are able to advise our clients on the most appropriate response to HMRC's 'nudge letter' and reduce the risk of exposure to unnecessary tax and penalties.

Proactively taking action

It is strongly recommended that you review your position immediately if you have concerns regarding underdeclared rental profits to HMRC. If a landlord makes an error, he or she can voluntarily disclose it under the LPC. Making an unprompted disclosure will result in a significantly lower penalty than if HMRC wrote to you first.

An overview of penalties and how to reduce them

HMRC must consider charging financial penalties whenever irregularities are identified. In considering penalties, HMRC will consider the underlying behavior, whether you came forward voluntarily, and the quality of the disclosure. The penalties aA percentage of the original understatement of tax is charged as penalties.

With long-established and proven track records, Bolton Tax Accountants ensures that our clients receive the minimum financial penalty allowed by law. In many cases, this results in no penalty being assessed.

What is the LPC disclosure process?

Regardless of whether HMRC issues you with a 'nudge letter' or you elect to come forward voluntarily, the LPC disclosure process is as follows:

1. You must register with HMRC in order to make a voluntary disclosure. The disclosure reference number (DRN) will be issued by HMRC within 15 days of receipt confirmation.
2. Within 90 days of HMRC confirming registration, the LPC disclosure must be submitted. Disclosure must include:
   • Rental income that has not been reported
   • Liabilities arising from taxes, interest, and penalties
3. The payment must be made at the time of submission unless HMRC has agreed to a time to pay arrangement.

What we can do to help

Bolton Tax Accountants can guide you through the Let Property Campaign disclosure process and provide you with bespoke advice. If you decide to seek specialist advice from Bolton Tax Accountants, we will:

• Conduct a thorough review of your tax affairs, identifying any issues that need to be disclosed, and assessing your exposure
• If appropriate, register you for the Let Property Campaign disclosure process
• Prepare and submit a Let Property Campaign disclosure that ensures you don't pay unnecessary tax, interest or penalties
• To bring your disclosure to a swift conclusion, deliver a letter of representation to HMRC to explain your position
• Depending on your needs and circumstances, you may need to negotiate a time-to-pay arrangement