PLEASE READ BEFORE POSTING

Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

Didn't declare tax on rental income

Hi guys,
Can I get some advice please?

I have been letting out my flat for the last year and a half but didn't realise I had to declare this income. I have now found out that I do so what is the best way of going about this? Do I contact the IR direct and be honest by telling them that I haven't declared anything for the last year and a half?

Anyone have and experience of this and what are the implications of doing this?

Thanks for any advice.
«13456789

Comments

  • Generali
    Generali Posts: 36,411
    Combo Breaker First Post
    Forumite
    I'd declare it if I were you - they should be fine about it although you may have to pay a small fine as the tax for fniancial year 2005-6 was due on 31st Jan 2007.

    The risks of continuing to hide it, if you are caught, are big penalties and (worst case) playing hunt-the-soap with Mr Big in the prison showers!
  • jaype
    jaype Posts: 349 Forumite
    Yes - don't leave it any longer or the old 'sorry gov, I didn't realise' (in your case, true) may start to sound a bit hollow. One lot of people you don't want to get on the wrong side of are the IR. If you are upfront they're really helpful.
  • Generali
    Generali Posts: 36,411
    Combo Breaker First Post
    Forumite
    Get yourself a tax accountant. You will be able to offset some or all of your expenses against the income, thus reducing your bill.
  • Thanks for the replies guys.

    OK, I'm going to declare it but how would I go about it? Do I phone the IR or fill in a self assesment form? Also, reading through the websites, they say that I should have all receipts for the last 6 years, whereas I have hardly kept any of my receipts :(. I'm looking at these contact numbers

    http://www.hmrc.gov.uk/contactus/helplines.htm

    but it's not clear which to ring. My guess would be Tax & Benefits Confidential?

    re: the accountant, would I really need one of those? I'm guessing they are going to be expensive and if I do save any because of their advice, it would go straight into their pocket, not mine.
  • Generali
    Generali Posts: 36,411
    Combo Breaker First Post
    Forumite
    I'd start with 0845 915 4515 (Newly Self-Employed) and take it from there.

    Accountants aren't necessarily that expensive and mine has saved me thousands over the years at a cost of a few hundred. And she's really pretty too!
  • Thanks, I'll give that number go.

    A few hundred quid in a few years and she's pretty?? What's her number? ;)

    How much are accountants? Are they paid by the hour - like £50 an hour? or per job?
  • mystic_trev
    mystic_trev Posts: 5,430
    Name Dropper First Post First Anniversary Combo Breaker
    Forumite
    I wonder how many other BTL's don't pay Tax on their Income - quite a few I should imagine. Even if the BTL isn't making a profit, they should still be filling in a Tax return. How many (the new breed of Landlord in particular) have thought about this?
  • Generali
    Generali Posts: 36,411
    Combo Breaker First Post
    Forumite
    It's a few hundred a year - that includes my company accounts. That's followed by dinner at Rules and a night in a hotel with my accountant.*

    I use an outfit called 1st Contact based in New Oxford Street. They're a bit of a factory but cheap and very good for the sort of accounting that I need. They charge per job but there are plenty of others that charge per hour.

    *In my dreams.
  • Generali
    Generali Posts: 36,411
    Combo Breaker First Post
    Forumite
    BTW, talk to your new-found accountant before the taxman. That way you know exactly what you need to say and do before you make the call.

    mystic_trev - it's a good point you make. Quite a few I suspect. I guess all those fines will help Gordon 'Bennett' Brown fill his black hole.
  • real1314
    real1314 Posts: 4,432 Forumite
    I wonder how many other BTL's don't pay Tax on their Income - quite a few I should imagine. Even if the BTL isn't making a profit, they should still be filling in a Tax return. How many (the new breed of Landlord in particular) have thought about this?


    Well, if they don't, they might be getting a knock on the door? I was chatting to a colleague the other day who told me her sis works at HMRC and they have teams who check newspaper ads, lettings agents etc etc for people renting houses out (amongst other things).

    There was also a report in the Mail on Sunday Financial section about some software they have that can trawl the internet to spot people trading through websites (incl ebay).

    BIG BROTHER IS WATCHING YOU. :eek:
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 342.5K Banking & Borrowing
  • 249.9K Reduce Debt & Boost Income
  • 449.4K Spending & Discounts
  • 234.6K Work, Benefits & Business
  • 607.1K Mortgages, Homes & Bills
  • 172.8K Life & Family
  • 247.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards