LET PROPERTY CAMPAIGN – TIP NO. 2
Today sees the release of our second tax tip, relating to the HMRC Let Property Campaign, as HMRC seek to retrieve unpaid tax on undeclared letting income from landlords and property investors. To see tip 1, please visit here, and for further relevant reading on our blog relating to this campaign, please see here. Our second tip relates to record keeping, and what is required in the absence of original documentation.
You should be using original invoices and receipts when putting together summaries of the rental information for past years. However, we do understand there can be some issues, especially when the property letting may have commenced some years ago.
In the absence of original invoices and receipts, the next step should be to obtain your past bank statements, which should help piece the jigsaw together. You are normally able to order quite a number of years worth of statements from your bank, which may come at a charge. However, if you bank online, it may be worth checking your archives, to ascertain whether past years may be printed off direct from your online account.
Following on from the above, this same technique can be used for past utility bills and certain other suppliers which offer this facility.
In the worst case scenario, HMRC suggest in their guidance to use your best estimates, and if this method is chosen, you must be able to supply justification if required. It is worth mentioning though, that without proof of an expense, you may find it difficult achieving agreement from HMRC. They would also expect you to explain why you have not been able to source the original documentation.
In any case, once you have all the information to hand, you are now ready to start compiling the data, and bringing order to the rental accounts.
To assist you, we offer a free Let Property Campaign template spreadsheet, which will help in bringing your records up to date. Please do not hesitate to contact us for your free copy, and of course, if you require any assistance in reporting the information to HMRC. We offer a full Let Property Campaign advisory service, and given our specialism in landlord tax, we would be delighted to guide you every step of the way.