HMRC has issued the first in a series of information bulletins for letting agents and tenants dealing with non resident landlords (NRL's). This first bulletin deals with the changes to the time limit for providing evidence of tax paid, the requirement for non resident landlords to seek HMRC approval before receiving their rental income gross, and the obligations of non resident landlords and their agents and tenants.
The bulletin confirms that where an auditor discovers that a letting agent or tenant has failed to account for tax under the NRL scheme, but the landlord has paid the tax on any rental income or had no liability, the auditor will normally only recover interest and penalties. Previously the auditor would allow letting agents and tenants 90 days to provide evidence that the landlord has paid the tax or had no liability. However for all audits occurring after 10 March 2010 the period allowed has been reduced to 30 days.
The bulletin also confirms that NRL's must receive HMRC approval before receiving their rental income gross and it sets out the application procedure for receiving such approval. It also confirms the steps that must be taken if a property is jointly owned.
Finally the bulletin sets out what the letting agents and tenants should do if they do not have a HMRC approval notice from the landlord.
The full text of the bulletin can be accessed here.