Property investments once again hit by new tax rules
In the last few years the property sector has been hit by a number of new tax rules, but now there are two new things on the horizon that landlords must consider.
The current Rent-a-Room scheme offers people up to £7,500 a year tax-free from letting out a spare room.
However, HM Revenue & Customs (HMRC) has revealed new plans to introduce a shared occupancy test, which would restrict the allowance to those landlords who are living and physically present in the property during the letting period.
For those letting out their whole property, this may mean that they are required to pay additional tax, while for some it may mean that it is the first time they are charged tax on their property rental.
The government will include legislation for the shared occupancy clause in the Finance Bill 2018 to 2019 and the change will take effect from 6 April 2019.
Let Property Campaign
Concerned that some landlords may not be paying the correct amount of tax on their rental property, HMRC has also launched the Let Property Campaign.
This will give landlords the chance to disclose any unpaid tax in the UK or abroad, allowing them to get up to date with their tax affairs.
Similar to other recent disclosure campaigns, once the tax is disclosed landlords have 90 days to calculate and pay what they owe. Full and voluntary disclosure of all unpaid liabilities will usually lead to a lower penalty for unpaid tax.
If a person does not come forward and HMRC discovers that tax is due, it may be harder to convince them that it was simply a mistake and they could find that a higher penalty could be applied – including fines of up to 200 per cent of tax due or criminal prosecution.
To take part in the Let Property Campaign a person should:
- tell HMRC that they want to take part in the Let Property Campaign
- inform HMRC about all income, gains, tax and duties not previously disclosed
- make a formal offer
- pay what they owe
There is no disclosure ‘window’ requiring a landlord to disclose what they owe by a specific date and HMRC have confirmed that the campaign will be ongoing for some time.
- Coronavirus Job Retention Scheme – Portal opens Monday 20 April 2020
- The Coronavirus Large Business Interruption Loan Scheme (CLBILS)
- Latest amendments to the Coronavirus Job Retention Scheme announced
- Personal loans, credit cards and overdrafts
- Revised Coronavirus Business Interruption Loan Scheme (CBILS)
- Take care – Coronavirus fraud on the rise
- Government updates guidance on small business and retail sector grant schemes
- Government confirms that furlough rules do not leave employers at risk of breaching minimum wage rules
- Newly appointed staff members will not benefit from the Coronavirus Job Retention Scheme
- Coronavirus support for people working through their own limited company
- Holiday rules relaxed to allow annual leave to be carried over to next two years
- Suspension of director liability for wrongful trading
- Soft-landing period for MTD for VAT extended to April 2021
- The Coronavirus Jobs Retention Scheme and employers’ National Insurance and Pension contributions
- What expenses are taxable when working from home?
- Preparations Checklist
- Coronavirus Business Interruption Loan Scheme (CBILS)
- Business rates relief extended
- Layoffs owing to reduced work
- Coronavirus Self Employed Income Support Scheme (SEISS)
- Tax and Companies House Deferrals
- Companies House Filing
- Personal Finances
- Working from home
- Commercial Rent Deferrals
- Coronavirus Job Retention Scheme Guidance Published
- Coronavirus Self Employed Income Support Scheme (SEISS)
- Accessing the Coronavirus Job Retention Scheme
- Important Message to Clients and Friends
- Payroll professionals confirmed as key workers
- Accessing the latest COVID-19 stimulus
- Inn Control Here to Help
- COVID19 - Further Update
- COVID19 Update: 18 March 2020
- COVID-19: Government Measures to Assist Small Business Experiencing Financial Hardship
- Budget 2020
- Entrepreneurs’ Relief changes expected in March Budget
- Get ready for a range of tax changes this April
- VAT zero-rating now applicable to businesses e-publications
- Latest case highlights the dangers of not meeting workplace pension requirements
- When was the last time you checked your NIC record?
- Property tax implications of getting divorced
- Make the most of the Brexit implementation period
- More than 3,000 taxpayers complete self-assessment on Christmas Day
- Should your company pay a data protection fee?
- SMEs now wait 23 days for late payments, new study finds
- Reminder: National Living Wage set to increase from April
- HMRC launches revamped CEST IR35 off-payroll working tool
- New Advisory Fuel Rates
- VAT receipts reach record level of £133 billion
- Around half of the UK’s SMEs admit to making errors on taxes
- Late payments a huge drain on SMEs
- The end of the help-to-buy ISA – What’s next?
- HMRC urges taxpayers to be vigilant ahead of self-assessment deadline
- Keeping workplace gifts tax-free this Christmas
- Annual R&D spend in the UK reaches £25 billion
- Countdown to the 31 January Self-Assessment Tax Return deadline begins
- Grant scheme opportunities for electric vehicle charging infrastructure at work
- Spanish holiday home owners cautioned over post-Brexit tax impact
- Businesses and contractors offered clarity on IR35
- Pension holders to be refunded £54 million of overpaid tax
- Newly cohabiting parents warned over new tax charge
- HMRC trialling self-assessment checks to help local authorities to recover council tax
- Overseas employees potentially face double NICs liability following a no-deal Brexit
- New figures show a sharp increase in Inheritance Tax (IHT) receipts
- Non-VAT-registered businesses need EORI number to trade with EU customers and suppliers post-Brexit
- 25,000 companies receive penalties for the late filing of accounts in just one month
- HM Revenue & Customs has started carrying out PAYE tax investigations remotely
- Wages rise at the fastest rate in a decade
- Renovated homes that have been empty for two years can qualify for a reduced rate of VAT
- Government delays introduction of VAT reverse charge!
- Making a voluntary disclosure to HMRC
- MTD for VAT filing deadline missed by one in ten businesses
- Boots, Asda and Specsavers push back against business rates
- Half of all SMEs make VAT return mistakes
- Tax investigations reap in £13 billion for the treasury
- How to tell if an email is fraudulent
- Government’s draft IR35 legislation contains important changes
- Construction businesses only have weeks left to prepare for the VAT reverse charge
- HMRC outlines changes to Capital Gains Tax treatment on second homes
- Summer childcare costs cooldown with Tax-Free Childcare
- Employment Allowance to be restricted from next year
- Principal Private Residence Relief and Lettings Relief changes due in April 2020
- New figures show that a quarter of estates paying Inheritance Tax (IHT) are investigated by HMRC
- Wealthiest UK families save nearly £700 million a year in Inheritance Tax
- Taxpayers’ bills delayed by payment on account errors
- SMEs unaware of £1 million annual investment allowance
- Businesses encouraged to increase readiness for no-deal Brexit
- Value of UK SMEs reach £3 trillion
- More than 150 chief financial officers and senior finance executives personally fined by HMRC last year
- Remember to pay the annual data protection charge
- Incorporation no longer automatically resets the two year requirement for sole traders
- Government confirms that HMRC will get a higher priority when firms go bust
- MTD for VAT - relaxation on posting supplier statements
- Significant lack of awareness around gifting rules for IHT
- EIS and SEIS tax relief funding passes £2.1 billion
- New code launched to help protect victims of sophisticated banking fraud
- Revenue tests new trigger to increase the accuracy of PAYE codes
- Pass on up to £950,000 tax-free in 2019-20