Are You a Tenant? Have You Recently Received a Letter From HMRC?

Received a Letter From HMRC

It is the usual practice of the HMRC to send out letters to tenants where the property is believed to be owned by an overseas company. This article explains more about the letters, Uk tax return, and Paye tax refund.

Why is HMRC Sending These Letters?

HMRC sends out compliance letters to tenants of residential property they believe is owned by an overseas company/trust. This is to make sure that the landlord is paying the correct amount of tax. If your landlord is not resident in the UK, you may have obligations under the non-resident landlord scheme as a tenant.

Who is HMRC Sending the Letter To?

Letters are sent to tenants of residential properties in the UK where information suggests the owner of the property is a company/trust not resident in the UK. The landlord has to pay UK tax on the rental income. The tenant has an obligation to take tax off the rent, before paying it to the landlord, and pay to HMRC. 

I Have Received a Letter; What Should I Do?

There is no legal obligation to respond to the letter, but, responding will enable HMRC to help you to get things right. It is important you answer the questions correctly. If you do not know the answer, reply “not known”. An alternative would be to write to HMRC stating the information you do know.

What Will HMRC Do if I Do Not Reply to the Letter?

There is no legal obligation to respond to the letter. If you do not respond, HMRC would register the property for a tax charge and issue a tax determination to the landlord. As tenant this is not a tax liability for you and would not affect UK tax return or Paye tax refund.

I Am a Tenant; What Are My Obligations?

If you rent a property in the UK, pay more than £100 a week, and your landlord lives abroad you must register with HMRC and deduct tax from your rent. You do not have to register with HMRC or deduct the tax if you pay the rent to a letting agent in the UK. You need to work out and pay the tax to HMRC within 30 days of the end of each tax quarter.

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