Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property118. Read the original article for full details.
House of Lords inquiry opens door for landlord evidence
A new House of Lords inquiry gives landlords and their advisers a chance to explain what a workable tax-correction process should look like, with written evidence invited by 5pm BST on 11 October 2026. The House of Lords Finance Bill Sub-Committee opened the inquiry on 18 September into parts of the Draft Finance Bill 2026–27, including HMRC's proposals for modernising the correction of errors, and wants to hear from taxpayers, advisers and other interested parties.
For landlords, the useful contribution is evidence about how the process would operate in a real property business. Rental accounts depend not only on keeping receipts but on a clear way to reconcile figures, investigate discrepancies and agree with an accountant on who will put matters right.
A separate chance to contribute
HMRC published the draft provisions and supporting material on 13 July 2026, with technical consultation responses due by 7 September. The parliamentary inquiry is a separate opportunity to contribute, with its own October deadline. The Sub-Committee's remit covers tax administration, clarification and simplification, rather than tax rates.
These remain proposals. HMRC's impact note specifies a future appointed day for the measure to take effect, and the inquiry's launch has not brought a new penalty regime into force.
What HMRC is proposing
The package would introduce an explicit obligation to act on relevant inaccuracies once a taxpayer becomes aware of them, applying where correction remains possible within statutory amendment or assessment time limits. Failure to take reasonable corrective steps could result in an inaccuracy being treated as deliberate, with consequences for penalties and assessment time limits, though that does not make every mistake deliberate or create unlimited powers to reopen old returns.
The draft legislation would also allow HMRC to issue a correction notice where it has reason to suspect a relevant, still-correctable inaccuracy. The notice must identify the suspected error or type of error and set a deadline; the taxpayer could correct it, notify HMRC where direct correction is unavailable, or explain why the return is accurate. A correction notice is distinct from a tax assessment: suspicion is not itself a determination that extra tax is due.
The draft includes conditional protection from careless-inaccuracy penalties, subject to a six-year notice-history test and timely corrective steps. Failure to comply with a notice could trigger a presumption of carelessness, unless the error is deliberate or the taxpayer establishes reasonable care.
Why it matters for agents and clerks
A practical submission could describe the documents needed to resolve a discrepancy and the obstacles in obtaining them. The source highlights an illustrative case where a letting agent's annual statement differs from the landlord's bank receipts, requiring reconciliation of fees, payment dates or money still held by the agent before anyone can establish whether the return needs changing.
Suggested issues to raise include what information would let a recipient identify the property, tax year and transaction concerned (a broad reference to rental income might leave an accountant unsure which records to investigate) and realistic response periods, such as how long it can take to retrieve statements from a former letting agent or accountant.
Source: Property118