17th March 2014
It is well publicised that the Government is committed to cracking down on tax avoidance and evasion, from individuals who bend the rules through to lawbreakers who evade their taxes altogether. Whilst David Gauke (Exchequer Secretary to the Treasury) announced in his ‘Compliance Progress Report (March 2013)’ that the UK’s tax gap figures rank among the lowest in the world, the Government is still committed to investing almost £1 billion in HMRC in a clampdown on avoidance and evasion. It is hoped that this investment will enable HMRC to secure £22 billion a year in compliance revenues by the end of 2014/15 – some 70 per cent more than 2010/11.
Since 2010 HMRC has carried out a number of specialist taskforces, targeting specific industries or locations, where there is evidence of tax evasion. As part of this activity HMRC run specific campaigns, providing opportunities for individuals to come forward and voluntarily put their tax affairs in order. The penalties imposed by HMRC for an unprompted disclosure under a tax campaign are more lenient than those who “choose not to pay up”.
It is believed that around a third of buy-to-let landlords could be dodging their tax on their rental income, at a cost estimated by HMRC of £550 million to the taxpayer. It is therefore hardly surprising that HMRC announced it was launching a special taskforce in 2013 to target private landlords, initially in the south-east, in order to crackdown on those evading tax.
The latest campaign being rolled out is the ‘Let Property Campaign’. This campaign provides an opportunity to bring your tax affairs up to date if you’re an individual landlord letting out residential property in the UK or abroad and to get the best possible terms to pay the tax you owe (on undisclosed rental income). Under the campaign you will need to tell HMRC about the income you haven’t declared by making a full voluntary disclosure and then calculate and pay any outstanding tax within 3 months (of notifying HMRC of the intention to participate in the campaign).
If you wish to discuss the issues raised in this article, please feel free to contact Simon Boxall at email@example.com