The non-resident landlords scheme is a good example of a trap for the unwary.
Whenever a tenant pays rent to a landlord that is non-resident, or to a letting agent who then pays the rent to a non-resident landlord, the non-resident landlords scheme comes into play.
Essentially, the tenant or letting agent needs to deduct tax before paying rent to the landlord and account to HMRC for this. The landlord will still need to complete a tax return which might result in more tax or a refund. It is possible for landlords to register to receive rent gross of tax. This applies to all landlords, including individuals, companies, partnerships or trusts.
On 10 March, HMRC have published the first of their “Information Bulletins” for non-resident landlords, designed to provide information about changes in HMRC practice and some FAQs: http://www.hmrc.gov.uk/cnr/nrl-bulletin1.pdf
If you need help in registering for the non-resident landlords scheme or in understanding how this applies to you, please feel free to contact me.