Third party data suggests landlord income mismatch
HMRC has been running a campaign focused on let property, writing to landlords with potentially underdeclared income.
HMRC routinely uses a wide range of third party data to check that taxpayer records are accurate. This campaign targets taxpayers whose records do not tie in with information from sources such as the Tenancy Deposit Scheme, and statutory returns HMRC receives about rents and other payments arising from land and property.
Anyone receiving such a letter from HMRC should respond by the deadline given. Where there is any possibility that income needs to be declared, this should be done according to the steps indicated. HMRC advises that where a let property has been disposed of, Capital Gains Tax could be due. There may also be obligations under Making Tax Digital for Income Tax to consider.
Letters like these should never be ignored, even if you believe all income has been correctly reported. Where HMRC fails to get a response from the taxpayer, it may open a compliance check or criminal investigation. This also raises the stakes in terms of potential penalties.
Professional advice will help achieve the best outcome in these circumstances. Please do not hesitate to get in touch.
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