Airbnb hosts who have neglected to declare taxable rental income have an opportunity to do so via HMRC’s Let Property Campaign (LPC).
If rental income from a second property is not covered by rent-a-room relief, this should be declared on a Self-Assessment tax return. HMRC will then tax the rental income accordingly.
However, there are many landlords who do not realise that this obligation exists. There are also those who think they are not making enough to warrant notifying HMRC, and who do declare the income but incorrectly so.
Airbnb have agreed to share data pertaining to its hosts income, for the tax years 2017/18, 2018/19, with HMRC. Presumably, this sharing of data will continue going forward.
Consequently, Airbnb hosts are likely to face scrutiny, and potentially investigation, where HMRC believe tax is owed. Some of those HMRC believes have unpaid tax may have already received communication prompting them to come forward.
This is where the ongoing ‘Let Property Campaign’, which was first launched in 2013, comes in.
The campaign was, first and foremost, designed to incentivise landlords with undeclared income to set things straight. However, it also serves to raise awareness of the circumstances that could lead a landlord to believe income need not be declared, or to make an erroneous declaration.
In essence, the LPC gives all residential property landlords the opportunity to make a voluntary disclosure. By doing so, they can mitigate any penalties that might otherwise have been issued.
Landlords must settle the amount of tax outstanding, once a voluntary disclosure has been made.
Making a voluntary disclosure via the Let Property Campaign
HMRCs guidance suggests that to participate in the Let Property Campaign, a landlord should:
- Notify HMRC of their intention to participate in the campaign
- Disclose any tax, gains, income and duties that they have not previously declared
- Make a formal offer, before paying what is owed
- Co-operate with HMRC, and its requests for information
However, making a voluntary disclosure can be complex. Anybody thinking of approaching HMRC should seek professional advice before doing so.
How can George Hay help?
If you are concerned about undisclosed rental income and so the tax liability that may arise as a result, our property tax experts are here for you. We can help you to make an accurate disclosure, ensuring that allowances are properly utilised in order to minimise your liability.
To discuss your circumstances with one of our property tax advisers in Hertfordshire, Bedfordshire or Cambridgeshire, contact us today.
