What is the Renters Reform Bill?
The Renters Reform Bill was introduced to Parliament on 17 May 2023. Part of the Renters Reform Bill proposes a new database with details of landlords and their properties let under residential tenancies.
Whilst the Renters Reform Bill is not specifically designed to empower HMRC nor does it form any part of the tax legislation, HMRC may get access to the information in the proposed database to assist them in their fight against tax evasion. Even the publicly available information will be enough to identify landlords who HMRC can then verify to see if they have been submitting tax returns disclosing the rental income.
Further property data will also be available from the Land Registry and HMRC’s own internal database known as CONNECT.
Landlords and the Let Property Campaign
HMRC have for a few years now been urging non-compliant landlords to voluntarily correct their position by using the Let Property Campaign, which is part of HMRC’s digital disclosure service.
Any landlords who have not been disclosing their rental income should seriously consider bringing their UK tax affairs up to date before the register is introduced.
Voluntarily coming forward to make a disclosure should result in lower penalties compared to rectifying mistakes after HMRC gets in contact.
Paying the tax liability now will also mitigate late payment interest, which is currently 6.75% per annum but set to rise to 7% from 31 May 2023.
If you are a landlord and believe that you might be impacted by the Renters Reform Bill or the Let Property Campaign, or, if you have rental property income which you have not previously declared to HMRC, contact our Private Client team today and we will help you work out the best way forward.