PIM4830 - The Non-resident Landlords Scheme - tenants

Which tenants are involved?

If a tenant pays rent to a non-resident landlord via a UK letting agent, it is the letting agent and not the tenant who must operate the Non-resident Landlords Scheme.

Tenants of non-resident landlords only operate the Scheme if the rent they pay is over £100 a week and they pay it direct to a non-resident landlord or someone who is not acting as a letting agent (see PIM4820).

However, HMRC may instruct tenants to operate the Scheme even where the rent paid is less than £100 a week. This may happen where a landlord has several tenants and the total rent he receives is over £100 a week.

You can get more information about the responsibilities of tenants from the online NRLS guidance in the document “Which tenants should operate the non-resident landlords scheme”.

Tenants’ obligations

Tenants who are required to operate the Non-resident Landlords Scheme must:

• notify HMRC
• account quarterly to HMRC for any tax due under the Scheme
• (where they are required to account for tax) provide their non-resident landlords with a certificate of tax liability each year
• complete an annual information return, if appropriate, and
• keep sufficient records to show that they have complied with the requirements of the Scheme.

Tenants have the right to deduct any tax they have to pay under the Scheme from their rent, or from any other money owing to the non-resident landlord. They also have the right to recover from the landlord any tax they have to pay under the Scheme where they did not deduct it from their rent or other money owing.