What is an LPC and how could it affect me?

LPC stands for Let Property Campaign. The LPC was created by HMRC for landlords who have not declared all their rental income to come forward to disclose any unpaid tax.

The LPC is applicable to landlords renting out the following types of properties:

• A single property
• Multiple properties
• A room in their main home (if the income exceeds the Rent a Room Scheme threshold)
• Holiday lettings
• Properties in the UK while living abroad or intending to live abroad for more than 6 months

However, an LPC is not applicable to landlords letting out to non-residential properties like shops or garages and is not applicable to companies and trusts letting out properties.

HMRC has harsh penalties for individuals that are not disclosing rental income. Penalties can be as high as 100 % of the unpaid tax due as well as interest being charged. The purpose of the LPC is for landlords to disclose rental income, therefore HMRC has given reduced penalties for unpaid taxes declared through an LPC. These penalties are shown below:

• Within 12 months: 0% – 30% (unprompted), 10% – 30% (prompted).
• Over 12 months: 10% – 30% (unprompted), 20% – 30% (prompted).
• Deliberate errors: 20% – 70% (unprompted), 35% – 70% (prompted).
• Deliberate and concealed errors: 30% – 100% (unprompted), 50% – 100% (prompted)

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