Important Notice For Letting Agents and Landlords

I hope people give this blog attention it deserves, and act accordingly!

I received a letter on behalf of a client of mine today, who runs a letting agency, from HMR&C requesting certain information. That in itself is not unusual however it was a “statutory notice” which means the agency has to supply the information by law. The statutory information notice is being sent to all relevant parties in March 2014.

The information requested from the letting agency will be used by HMR&C “to check that the landlords declare the rents on their tax returns” as quoted in the HMR&C letter. They are asking for names and addresses of the landlord, the amount of rent collected on behalf of the landlord and the address of the property. Now you will either be reading this from a letting agency point of view and thinking that you will ignore this request as you don’t want to go to the expenses of listing all the details on a spreadsheet template provided by HMR&C. Well unfortunately ignoring this request could result in you receiving an initial penalty of £300 plus up to £60 per day for a continuing failure. Or you are reading this as a landlord and hopefully will be relieved that you are declaring all your rental income and have nothing to worry about. However, only in the past 2 weeks I have had 2 clients receiving letters from HMR&C informing them that they have under-declared rental income on their tax returns and are subject to an enquiry which will no doubt result in tax and penalties being paid. So if you receive rental income please make sure it is declared on your tax return for the 12/13 tax year as HMR&C will be shortly receiving all this information to ensure your tax returns are accurate.