Do you think it is non-taxable income? Maybe the expenses and mortgage payments exceed the rent you receive? Or you let it out to a family member or to a friend for a small rent?

Sadly that’s not the case. If you receive rental income it is very likely that it needs to be reported each year on your annual tax return.

HMRC now have access to information from other sources such as Land Registry and if they discover that you have not been disclosing rental income, they can raise assessments for earlier years going back as far as 20 years in some cases and they will charge the tax due for each relevant tax year plus interest for late paid tax plus penalties based on up to 100% times the tax due.

If you disclose the rental income for earlier years voluntarily, you may be able to negotiate a lower rate of penalties, which can be quite advantageous if you owe a lot of tax for a number of years.

We are aware that HMRC are currently running a campaign and targeting those in our local postcode area.

If you have rental income to disclose and you need advice on how to handle this please let us know.