Dealing with HMRC property income compliance letters

May 6, 2010 - PRLog -- Property investors who have received a letter from the taxman asking for a call about unpaid tax on income from property letting, then you need to speak to a property professional like Property Investment Expert.(Link: http://www.property-investment-expert.com)

The local compliance inquiry letter is a tender trap aimed mostly at buy-to-let landlords who rented out their former home after moving on.

HM Revenue and Customs already know from a link up with the Land Registry and council  electoral rolls that the majority of taxpayers receiving these letters owe capital gains tax from selling a property that was not their main home.

The letter talks about property income that lulls the taxpayer the inquiry is about rental profits.

The telephone chat goes down a different route – asking if you still receive the letting income and if not, why not. The taxpayer then volunteers the house was sold and the interview then expands in to a capital gains tax inquiry.

Not only will the tax inspector want details of rental profits or losses for each year, but information about selling the property as well.

The end result is a property investor can end up paying undeclared tax plus penalties and surcharges that can amount to between 55 -100% of the tax owed depending on the case.

Dealing through a professional adviser like Property Investment Expert (Link: http://www.property-investment-expert.com) will make sure a tax professional talks to HMRC for the property investor.

You must declare letting income and proceeds from disposing of a property, but Property Investment Expert can also make sure all allowable allowances, expenses and reliefs are set off against the amount owed.

This minimises the tax due – and the penalties and surcharges on the unpaid amount as well.

“We have dealt with a lot of these property letting compliance letters,” said Steve Sims, of Property Investment Expert. “Phoning up the taxman without taking professional advice invariably costs taxpayers more.

“Property investors must come clean and deal with the issue – but this does not mean going through property transactions with a fine tooth comb to reduce tax and penalties. Generally, we can negotiate a big reduction on the amount taxpayers pay if they deal direct with the taxman.”

If you have received a local compliance letter about income from property letting, do not delay because the initial response window is only 14 days. Contact Property Investment Expert straight away for advice.

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Property Investment Expert (Link: http://www.property-investment-expert.com) is a leading UK tax and accountant firm specialising in proeprty investment and buy to let taxes like income from rent and capital gains. The firm is run by bestselling writer Steve Sims, author of 'Understanding and Paying Less Property Tax for Dummies'