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Where Taxpayers and Advisers Meet
Property tax campaign - How long to remain?
02/08/2019, by Jennifer Adams, Tax Articles - Property Taxation
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In 2013 HMRC announced a series of campaigns designed to give taxpayers the opportunity to bring their tax affairs up to date on advantageous penalty terms - no questions asked. Each campaign targeted a specific taxpayer group or type of taxable activity. All except two of those campaigns have now closed but one that has stood the test of time is the 'Property Tax Campaign'. Question is... how long with this campaign remain available? 

HMRC's original investigations led them to believe that there are as many as 1.5 million landlords in the UK, but it had fewer than 500,000 officially on its' books. In the five years since the campaign started, 35,099 people have made voluntary disclosures being only 2.3% of the individuals originally identified. Of the original estimate of £500 million in underpaid taxes, the campaign has so far recovered only approximately 17.1% (£85 million) of that amount. 

The campaign is a good deal if you have been receiving rental income but not declared receipt for whatever reason. This is because the penalty for a full and voluntary disclosure of all unpaid liabilities under the campaign is a lower fixed percentage of the tax lost (i.e. unpaid). Penalties under an enquiry or compliance check levied under the 'failure to notify chargeability' charge start at30% to 100% maximum. Under the 'campaign' the rates offered are 0%, 10%, 15%, 20% and 35% depending upon the reason as to why the declaration had not been made in the first place. 

Should a taxpayer wish to take advantage of this campaign the notification is made online following which HMRC will issue a disclosure reference and a payment reference.Within 90 days of receipt of the reference letter a submission must be made detailing the undeclared income and expenses going back as far as the non declaration requires. The percentage penalty is calculated depending upon the answer to the question "Please enter the reason(s) for the penalty rate(s) you have chosen".The taxpayer must decide whether the reason was an error despite taking reasonable care, whether the non declaration was careless, or whether it was something that was done deliberately. The taxpayer then calculates the amount of tax lost plus the penalty plus back interest chargeable from the date that the tax would have normally been paid calculated using either afive or 19 year calculator given.  

Once the final amount has been agreed the liability, interest and penaltiesare payable. In many cases, this can be a large sum of money and so there is a usually a period of negotiation to organise a'time to pay'. 

Note that the 'campaign' process is still possible should a taxpayer not come forward but instead receives a 'prompt' letter from HMRC and responds within the time limit set in that letter.  

About The Author

Jennifer Adams FCIS TEP ATT (Fellow) started business life in the Secretarial department of a FTSE 100 company before moving into tax as the UK Group Head of Tax of a Canadian life Assurance and pensions group. The group comprised 6 subsidiary companies and a unit trust company managing 9 unit trusts, with total premium income in excess of £700m and total staff of approx 600.

The 1990 Canadian recession resulted in the company being taken over and Jennifer moved into practice to gain experience at Senior Tax Manager level for Top 10 firms of accountants both in the UK and the Channel Islands. She now runs her own two office accounting practice and provides writing and proof reading services for specialist tax and business publication companies and virtual websites. Her work has been published by Bloomsbury Publishing, LexisNexis, Taxbriefs and Wolters Kluwer as well as Sage Publishing and the Chartered Insurance Institute. 

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