PIM4890 - Overseas landlords - HMRC process and compliance
If you receive general enquiries from a non-resident landlord they should be referred to the non-resident landlords scheme guide.
Questions about a landlord’s own tax affairs should be dealt with by the appropriate responsible office for the non-resident landlord.
Detailed enquiries about the non-resident landlord scheme (NRLS), or about landlords, agents and tenants applications should be referred to:
Charities, Savings & International 1
HMRC
BX9 1AU
Or by phoning the Non-Resident Landlord helpline on: 0300 322 9433 (from the UK) or +44 300 322 9433 (from abroad)
Failure by agent to operate the non-resident landlord scheme
If you discover a letting agent, or a tenant paying rent above the de minimis limit to a non-resident landlord, appears to be failing to operate the scheme, you should refer the information to:
Charities, Savings & International 1
HMRC
BX9 1AU
New cases – no agent or tenant record
Where you find that an individual goes abroad and rents out their UK property without an agent or tenant operation the NRLS, you should take the following action:
- set up an SA record
- issue form NRL1 (in the case of co-owned property - including married couples and civil partners - one to each co-owner).
- Make a note on the SA record that you have issued an NRL1
Once the application is approved, BT&C will notify you using form NRL11. You should make a note of this approval and the registration number in SA Permanent Notes and set the profile to ensure that Land & Property and Non-Resident pages are issued with SA Returns.
Assessing procedures
Under the NRLS, tax is payable quarterly by letting agents and tenants without the need for an assessment. However, there will be circumstances in which HMRC will decide that an assessment is needed - SI 1995/2902 Regulation 10.
CLPI has responsibility for issuing assessments on letting agents and tenants. Any enquiries should be directed to:
Charities, Savings & International 1
HMRC
BX9 1AU
or by phoning the Non Resident Landlord helpline on 0300 322 9433 (from the UK) or +44 300 322 9433 (from abroad).
Assessed tax carries interest, at the same rate as interest under TMA70/S87, from 30 days after the end of the quarter, irrespective of the date the assessment was made.
Appeals will continue to be heard by the Tribunal Services and, should the need arise, you will be contacted about the Tribunal Services procedures.
Compliance
Information about HMRC compliance processes can be found in the online guide – see the heading “HMRC compliance checks” in the document “Record keeping for the Non-resident Landlords Scheme”.
Penalties – basis
HMRC can charge penalties in certain circumstances relating to the non-resident landlord scheme under section 98 of the Taxes Management Act 1970 (TMA70). These penalties apply to the scheme because “section 42A” (of the Taxes Act 1988) is listed in both tables in s98. The reference to “section 42A” now applies to its successor provisions, sections 971 and 972 of the Income Tax Act 2007. The time limit for levying a penalty is in S103 TMA70. Those penalties are as follows.
Penalty – relating to information
HMRC can charge a penalty for:
- Failure to provide a return or other document, or information, in response to an HMRC notice relating to the non-resident landlord scheme – s98(1)(a) TMA70.
- Failure to provide information, give a certificate or provide a document as part of the non-resident landlord scheme – S98(1)(b) TMA70.
In either case the maximum penalty is £300 and daily penalties of up to £60 per day. Guidance on s98(1) penalties can be found in the Enquiry manual from page EM4900.
Penalty – providing incorrect information, document, etc
HMRC can charge a penalty where a person operating the non-resident landlord scheme fraudulently or negligently provides incorrect information, document, certificate, etc – s98(2) TMA70.
The maximum penalty is £3000. S98(2) TMA70 penalties are determined under S100 of the same Act. There is guidance in the Enquiry manual from page EM6050.