What is the Let Property Campaign (LPC)?

The Let Property Campaign is a voluntary disclosure initiative introduced by HMRC to encourage landlords to rectify any undeclared rental income on their tax returns. Michael Filiou offers expert advice and practical guidance to help landlords negotiate favourable repayment plans and navigate the disclosure process effectively.

Purpose and Scope of the Let Property Campaign

The Let Property Campaign aims to address the issue of landlords failing to declare their rental income. HMRC estimates that only around 500,000 individuals report rental income from second properties, while there are approximately 1.5 million residential landlords. This discrepancy prompted HMRC to launch the Let Property Campaign (LPC) to encourage voluntary disclosure and compliance.

Voluntary Disclosure vs. Prompted Disclosure

Landlords who voluntarily come forward to disclose undeclared rental income will be treated more favourably than those who wait for HMRC to contact them. Voluntary disclosures typically result in lower penalties and a more streamlined process. If you fail to disclose voluntarily, you may receive a prompted disclosure letter from HMRC, giving you a 30-day period to contact them and three months to complete the disclosure process.

Eligibility for the Let Property Campaign

The Let Property Campaign specifically targets residential landlords who have not declared rental income. It does not apply to individuals renting commercial properties or companies owning rental property.

Steps for Voluntary Disclosure

1. Seek Professional Advice: Consult with a tax specialist like Michael Filiou to assess your situation and receive expert guidance on the disclosure process.
2. Notify HMRC of Your Intent to Disclose: Inform HMRC of your intention to make a voluntary disclosure through their online or telephone channels.
3. Submit a Complete Disclosure: Within three months of declaring your intention to disclose, prepare and submit a comprehensive disclosure to HMRC, including all undeclared rental income, applicable taxes, and supporting documentation.

Penalties and Interest

HMRC generally imposes lower penalties for voluntary disclosures compared to prompted disclosures. However, the specific penalty rates depend on various factors, including the amount of undeclared income and the timing of disclosure. You will also be charged interest on the unpaid taxes from the date they were due until the date of full payment. Incomplete or inaccurate disclosures may lead to higher penalties.

HMRC’s Enforcement Measures

HMRC is actively pursuing landlords who fail to declare rental income. They are employing various tools, including rental deposit scheme records and Land Registry documentation, to identify individuals who may be generating undeclared rental income.

Seeking Expert Guidance

Navigating the Let Property Campaign can be complex. Michael Filiou provides tailored advice and support to landlords throughout the disclosure process, helping them achieve favourable outcomes and minimise potential liabilities.