HMRC Let Property Campaign Voluntary Disclosure – Case Study
Martax Accountant is a firm of Chartered Certified Accountants providing services to individuals and small businesses in the UK. We are registered with the Association of Chartered Certified Accountants (ACCA). Since we started our company in 2013, we have submitted Let Property Campaign disclosures for many clients in various scenarios. We will focus on one of our clients as a case study to explain how the Let Property Campaign Disclosures are submitted to HMRC.
Non-Resident Landlords – HMRC Let Property Campaign Voluntary Disclosure
We were approached by a couple based in the US who had been renting a property in the UK since 1998. They were non-resident landlords and never submitted self-assessment tax returns in the past. They didn’t receive any HMRC let property campaign letter. However, they learned from their online reading that they are required to submit a self-assessment tax return as non-resident landlords.
They approached Martax Accountants that they would like to file the self-assessment tax returns for all previous years. After an initial conversation, we advised them that filing a voluntary disclosure under the HMRC Let Property Campaign would be the best approach as the Let Property Campaign offer lower penalties in comparison to the penalties levied under the self-assessment regime.
Once we agreed on the scope of work involved with the clients, the engagement letter was signed, and we started working on their property campaign disclosure. As the property was in joint ownership and taxpayers never submitted self-assessment tax returns in the past, there were two disclosures to be submitted to HMRC.
How do we prepare and submit the Let Property Campaign Disclosure
After the engagement letters were signed, we appointed Martax Accountants as agents for the couple so that we could deal with HMRC regarding their tax affairs.
Then, we started working on the preparation of the Let Property Campaign Disclosure. We followed the following steps to ensure that the disclosure is submitted to a high standard.
- Notify HMRC of making a Voluntary Disclosure: Firstly, we called HMRC to inform them that as an agent of our clients, we will prepare and submit a let property campaign disclosure for the couples. Therefore, any future correspondence related to the disclosure should be sent to us.
- Requested information from client of their rental income and expenses: We requested the client to provide information about their income for all the previous tax years. We requested that they give the details of their rental income or expenses in a spreadsheet or the source documentation showing the rental income or expenses. They provided us with their rental income and expenses in a spreadsheet. In some cases, they were unsure of their expense details, so we had to make reasonable estimates.
- Calculation of Rental Profits, Penalties and Interest: Based on the information provided, we calculated rental profits for each tax year and sent to clients for their review. Once they agreed, we calculated the tax liabilities for each tax year, the interest due, and the applicable penalties. We provided our clients with the total amount due, including tax due, interest and penalties.
- Luckily, the couple made big capital expenditures in the early years of renting the property, which resulted in losses in the initial years. This resulted in the tax liabilities being lower than our initial expectation, considering the length of the Let Property Campaign Disclosure.
- Once the client agreed upon the final tax liability, we prepared the final disclosure documents online and submitted them to HMRC.
- We also advised our clients on how to make the tax payment and the reference to be used when making the payment to HMRC.
- After submitting the disclosure, we received a call from HMRC requesting us to explain a few calculations, which we did. They were satisfied with our explanations, and the matter was settled without any further queries from HMRC.
I hope the above case study can help people give an idea of what they can expect in dealing with HMRC Let Property Campaign disclosure. At Martax, our team of let property accountants experts have in-depth knowledge and experience dealing with disclosures. We have extensive experience dealing with HMRC HMRC Let Property Campaign disclosures and other tax investigation matters.
Get in touch with us for an initial FREE Confidential Consultation with one of our expert Let Property Campaign Accountants at info@martaxaccountants.com.
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