Less than three per cent of eligible landlords have used the let property disclosure facility, according to new figures.
The let property disclosure facility was launched in 2013 after the Government estimated that up to 1.5 million landlords had underpaid around £500 million in tax between 2009 and 2010.
HM Revenue & Customs (HMRC) said the scheme, entitled the Let Property Campaign, presented an opportunity for landlords who owe tax through letting out residential property, in the UK or abroad, to “get up to date with their tax affairs”.
The disclosure facility applies to landlords with single or multiple rental properties, holiday lettings, and room rentals which exceeds the Rent a Room Scheme threshold, as well as other conditions.
While there is no disclosure ‘window’ requiring landlords to come forward before a certain date, HMRC said landlords who delay may risk higher penalties if they become subject to an enquiry.
Landlords who rent out property may be liable to pay certain taxes, such as income tax on the revenue generated from letting out properties.
However, the latest data suggests that just 35,099 people have made a voluntary disclosure to HMRC as of this month, representing only 2.3 per cent of the total estimated individuals identified to have underpaid tax.
The figure also means just £85 million of the estimated £500 million tax gap has been filled, suggesting that HMRC is likely to take a less lenient stance in future campaigns.
If you believe you may have paid the wrong amount of tax, get in touch with our expert team as soon as possible.