Income generated from property has always been a favourite of HMRC and the current property sales campaign is aiming to encourage taxpayers to voluntarily come forward and declare any gains which might be taxable. Taxpayers have until the 9th August 2013 to tell HMRC and until the 6th September to pay any tax!
After that HMRC says it will “use the information it holds to target those who should have made a disclosure under this campaign and failed to do so.” This is not to be underestimated! There is a wealth of electronic information available these days including Land Registry records and Voters lists, which can be cross referenced with tax returns.
HMRC is also keen to track down undeclared rental income and we have it on good authority that they are planning to step up this activity by serving information notices on Letting Agents to gather names and addresses, amounts etc. We have seen this tactic used to great effect in the past resulting in a flurry of tax payer enquiries!
If this is you, you might be thinking “should I stay hidden or come clean?” My opinion is that a voluntary declaration is the best route forward. The financial consequences will be less, certainly as far as penalties are concerned, and you don’t have to worry about the nasty letter or knock on the door. This type of disclosure is ideally managed and dealt with by a tax professional, so give me a call if you need my help.