HMRC has warned landlords to disclose their earnings on self assessment tax returns.

The tax authority has clarified the guidance on who can participate in the Let Property Campaign, which is targeted at landlords who owe tax through letting out residential property in the UK or abroad.

Landlords can report previously undisclosed taxes on rental income to HMRC under the Let Property Campaign if they are an individual landlord renting out residential property.

The campaign covers landlords who rent out single or multiple properties, rent out a room in their main home that exceeds the Rent a Room Scheme threshold and holiday lettings.

It is also important to note that, for those living abroad or intending to live abroad for more than six months and renting out a property in the UK, those earnings may still be liable to UK taxes.

Tax must be paid on any profit made from renting out property. The profit is calculated based on the amount left once claims for expenses or allowances have been deducted.

HMRC warned:

‘If you’re a landlord and have undisclosed income, you must tell HMRC about any unpaid tax now. You’ll then have 90 days to work out and pay what you owe. If you do not do this now, and HMRC finds out later, you could get higher penalties or face criminal prosecution.’

Internet link: GOV.UK

People selling unwanted items online can continue to do so without any new tax obligations, HMRC has confirmed.

The reminder comes as online platforms start sharing sales data with HMRC from January 2025 – a new process that, when announced last year, generated inaccurate claims that a new tax was being introduced.

But whether selling last year’s festive jumper, getting some money back for a child’s outgrown baby clothes, or quietly offloading an unwanted Christmas present or two – absolutely nothing has changed for online sellers.

The new reporting requirements for digital platforms came into effect at the start of 2024. HMRC says that it is not a new tax and whether people are selling personal items on eBay, renting homes out on Airbnb or delivering takeaways through Just Eat – no tax rules have changed. 

Those who sold at least 30 items or earned roughly £1,700 or provided a paid-for service, on a website or app in 2024 will be contacted by the digital platform in January to say their sales data and some personal information will be sent to HMRC due to new legal obligations.

Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive Officer, said:

‘We cannot be clearer – if you are not trading and just occasionally sell unwanted items online – there is no tax due.

‘As has always been the case, some people who are trading through websites or selling services online may need to be paying tax and registering for self assessment.’

Internet link: HMRC press release

Import and export businesses are frustrated by the government’s decision to pause work on the digital trade platform, according to the Institute of Directors (IoD).

When fully operational, the Single Trade Window will provide a gateway between businesses and UK border processes and systems, allowing users to meet their import, export and transit obligations by submitting information once and in one place.

However, the government now says that in the context of financial challenges, it is pausing delivery of the UK Single Trade Window in 2025/26.

Emma Rowland, Trade Policy Advisor at the IoD, said:

‘It is frustrating to see the government’s decision to halt the development of the Single Trade Window due to financial constraints following the Budget, particularly given extensive industry engagement and the project’s proximity to completion.

‘According to our own data, paperwork remains the largest obstacle for organisations involved in international exports. The Single Trade Window, designed to streamline border processes through a unified platform, has the potential to significantly ease this administrative burden on firms, making importing and exporting more efficient. Additionally, it could enhance data collection to better monitor and understand UK trade flows.

‘We urge the government to prioritise the Single Trade Window in the upcoming Spring Spending Review to facilitate trade for all UK companies.’

Internet link: IoD

The extra costs of the increase in employers’ NICs could cause businesses to respond in ways the government did not intend, the Chartered Institute of Taxation (CIOT) has warned.

At the Autumn Budget, Chancellor Rachel Reeves announced an increase to the rate of employer NICs by 1.2 percentage points, to 15% from 6 April 2025.

The CIOT says that the increase extends the differential in the burden of tax and NICs borne by those in employment compared to those engaged as self-employed.

The higher employers’ NICs goes, the greater the likelihood employers may seek ways to mitigate or absorb the burden, which could include potential alternative arrangements to taking on people as employees, adds the CIOT. Alternatives could include outsourcing or offshoring services and reducing the numbers of employees.

Eleanor Meredith, Chair of CIOT’s Employment Taxes Committee, said:

‘While employers must pay employer NICs on their employees’ earnings, no employer NICs is due where someone is genuinely self-employed.

‘We are concerned that the increase in employers’ NICs could lead to an increase in ‘false self-employment’, where businesses trying to save money turn to arrangements where the worker is not directly employed by them, without necessarily appreciating the rules and risks of such arrangements.

‘A worker’s employment status for tax is notoriously difficult to judge, as we have seen from recent complex litigation involving some TV presenters. HMRC will need to be sufficiently resourced to tackle potential increases in ‘false self-employment’.’

Internet link: CIOT

Chancellor Rachel Reeves pledged to ‘invest, invest, invest’ to drive growth and ‘restore economic stability’ in the Autumn Budget.

The Budget, which was Labour’s first in over 14 years and the first ever delivered by a female Chancellor, saw £40 billion in tax announcements. 

Ms Reeves repeated her claims that the government had inherited a £22 billion ‘black hole’ in the public finances from the Conservatives. 

Pre-Budget speculation had centred on the likelihood of increases to employers’ National Insurance contributions (NICs), Capital Gains Tax (CGT) and Inheritance Tax (IHT).

The Chancellor announced an increase to the rate of employer NICs by 1.2 percentage points to 15% from 6 April 2025. However, the Secondary Threshold – the level at which employers become liable to pay NICs on each employee’s salary – will reduce from £9,100 per year to £5,000 per year.

CGT on non-residential assets will increase from 10% to 18% for those paying the lower rate, and 20% to 24% for those paying the higher rate for disposals from 30 October 2024. These new rates will match the residential property rates. The CGT rates applicable to assets qualifying for Business Asset Disposal Relief (BADR) and Investors’ Relief will remain at 10% this year, before rising to 14% from April 2025 and 18% from April 2026.

The IHT nil rate band remains unchanged at £325,000 although from April 2027 inherited pension pots will be brought into the IHT net. The government says this will remove a distortion which has led to pensions being used as a tax planning vehicle to transfer wealth rather than their original purpose to fund retirement.

From April 2026, agricultural property relief and business property relief will be reformed. The highest rate of relief will continue at 100% for the first £1 million of combined business and agricultural assets on top of the existing nil rate bands, fully protecting the majority of businesses and farms. The rate of relief will reduce to 50% after the first £1 million. 

The Chancellor also confirmed that VAT will be in on private school fees and abolishment of the non-dom tax regime.

Ms Reeves said she would protect living standards by unfreezing the thresholds on Income Tax and NICs from 2028 while she extended the cut in Fuel Duty for another year. 

Reeves said:

‘The choices I have made today are the right choices to restore stability to our public finances, to protect working people, to fix our NHS and to rebuild Britain.

‘That does not mean that these choices are easy, but they are responsible.’

Internet link: GOV.UK