If you own a UK holiday let are you declaring your rental profits to HMRC? If not time may be running out to make a voluntary disclosure of past profits.
HMRC has the power to request information, or documents, from third parties such as holiday booking sites; as well as being able to search for properties like anyone else. In addition AirBnB previously agreed to share information on income earned by its UK houses as part of a 2020 settlement with the Treasury. No doubt HMRC will be checking these details to discover those who are not declaring the income, or under declaring income.
If HMRC should discover any undeclared income they will seek to recover the underpaid tax. If this has never been declared HMRC can go back 20 years. Furthermore it could risk HMRC investigating your tax affairs in more detail as they may consider what else is not being declared. As well as interest being charged on underpaid tax, penalties will also be considered for the failure to notify HMRC of the liability. These can be charged on up to 100% of the tax underpaid.
However if you make a voluntary disclosure to HMRC these penalties can be mitigated, usually down to 20%. Currently HMRC are running a let property campaign which makes a voluntary disclosure easier and allows the minimum penalties to be offered. Furthermore a voluntary disclosure usually results in a speedy resolution without further enquiries from HMRC.
If you have undeclared letting profits to report to HMRC we can assist you with this and deal with HMRC on your behalf, relieving the pressure on you and securing the lowest penalties. As well as ensuring you claim any relief’s you are entitled to.
Please do contact us if you would like further information on making a disclosure to HMRC.