Further to my post in November about missed ATED filings, HMRC are sending a further letter to companies who have purchased UK property since April 2020 but not filed an ATED return.
The follow up HMRC letter advises that failure to respond may result in a Revenue Determination under which HMRC will send a notice for payment of the ATED which they estimate is due from the information they hold.
HMRC are receiving more and more information about taxpayers (both UK resident and non-UK resident) and their purpose-built data matching and risking software, HMRC Connect, is being fully utilised to build profiles of taxpayers and raise alerts where the system thinks more tax may be due.
When it comes to UK residential real estate, there will be a further reporting requirement for overseas companies once the beneficial ownership register for overseas entities comes into force (this is commonly referred to as the "PSCOC Register", PSCOC standing for 'Persons with Significant Control of Overseas Companies'). This PSCOC Register will come into force at some point this year and will require overseas companies owning interests in UK land to report their beneficial ownership in much the same way as UK companies already do. Failure to comply with the PSCOC register will in most instances make it impossible to sell, mortgage or transfer the UK land or property owned by the overseas company.
Recipients of the latest ATED nudge letter from HMRC would be best advised to reply to HMRC as soon as possible. It may be that a relief applies and so no tax is due, but HMRC will need to be informed and a relief return filed even if there is no tax to pay.
HMRC letter to Annual Tax on Enveloped Dwellings (ATED): non-filers