Accountants and tax advisers are reporting that HMRC has sent out a spate of what are called ‘one-to-many’ letters to taxpayers.
The latest target audiences are those individuals claiming Research and Development Tax Relief, individuals exceeding the Business Asset Disposal Relief lifetime limit, and - surprise, surprise - undeclared income from short-term property letting.
The letters are reported to have been sent by HMRC in the week beginning February 6, but may have been delayed by postal service disputes.
They have been sent to short let landlords advertising on sites such as Airbnb, Vrbo, Booking.com and Holiday Lettings.
Tax advisory service Ross Martin says the letter states that HMRC’s records show the recipient may have earned income from short-term property letting and not declared it, meaning tax may be due.
The Revenue then asks that a ‘certificate of tax position’ is completed within 30 days. Where income needs to be declared, HMRC suggests using the Digital Disclosure Service.
Another tax advisory service - Morris-Wheeler - says: “You will be in a much better position and get more favourable terms from HMRC if you come forward and disclose before being prompted to do so.
“You start by making a submission to HMRC confirming your intention to disclose. This notification is submitted through HMRC’s Digital Disclosure Service. This will be followed by a letter from HMRC acknowledging your submission and setting a 90-day deadline for you to submit and finalise the disclosure.
“This can be extremely complicated and challenging as HMRC expect you to come forward with a complete and accurate disclosure of under-declared income/gains, associated tax and interest due and also assess the correct level of penalties.”
Some residential landlords operating in the mainstream long-term lettings market were the recipients of nudge letters as recently as November, targeting that it suspected were not declaring their full rental income.
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"Nudge letters"; like the kind nudge you might get from your friendly Mafia enforcer...!
Business acid disposal relief.
Research and Development tax relief. AirBnB nudge nudge, no need to nudge buy 2 let landlords they have it take up front.
Landlords should pay their taxes. But I'll know a non LL who is meticulous in paying his correct tax.. But he also received a "nudge letter"!
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