Let Property Tax - Help Greatly Appreciated!

TELBHOY79

I am currently completing my Tax returns for the last 6 years, as I have never declared (stupidly). I am trying my best to provide as much info as I can, I just need a few bits of help. I have my last 6 years Interest payments for my mortgage and also bank statements for the same time, but there are other costs I never kept hold off, and I dont know how much to declare, what would be reasonable for home DIY and repairs?? I also had a new flat roof put on a bathroom extension, which cost £6-700, will they allow this without proof?

fengirl_2

Have you already informed HMRC about this income? If not, then you really need to see an accountant because you are opening yourslef to penalties and interest in respect of the tax lost and hMRC may want to settle the matter by agreement, rather than completing tax reurns.

If however, its just a matter of you not completing returns which were sent to you, then you still need to make accurate returns. You cannot estimate costs without some evidence - HMRC are going to look at these returns closely because they are so late and exactly in order to find out how accurate they are. Can you get the builder who did the roof to give you a duplicate invoice? Otherwise, I would make the accounts as accurate as possible as you are already in default and you dont want to make matters worse.

TELBHOY79

fengirl wrote: »

Have you already informed HMRC about this income? If not, then you really need to see an accountant because you are opening yourslef to penalties and interest in respect of the tax lost and hMRC may want to settle the matter by agreement, rather than completing tax reurns.

If however, its just a matter of you not completing returns which were sent to you, then you still need to make accurate returns. You cannot estimate costs without some evidence - HMRC are going to look at these returns closely because they are so late and exactly in order to find out how accurate they are. Can you get the builder who did the roof to give you a duplicate invoice? Otherwise, I would make the accounts as accurate as possible as you are already in default and you dont want to make matters worse.

No I just received a letter stating, it has come to their attention that I am getting income on a let property, and I have to complete a property declaration form stating my rent income and expenses for each of the last 6 years. I had to call a girl from HMRC, and told her I have no receipts and she said she will allow what she thinks is resonable?? I thought I would fill the form in myself as is it really self explanatory, but there are just some details Im am not 100 per cent on. There are some years when the property was vacant for 2-3 months, do I still deduct the full years mortgage interest?? I lived in the property as my main residence for 6 months, how do I show that in that years return??

John_Pierpoint

Were you letting furnished?
You can claim 10% for wear and tear.

[Do let us know how you get on - how do you think they found you - they won't be happy]

Anon

TELBHOY79 wrote: »

There are some years when the property was vacant for 2-3 months, do I still deduct the full years mortgage interest?? I lived in the property as my main residence for 6 months, how do I show that in that years return??

You can claim mortgage interest (not repayment) for the full period it was let - whether it was rented or not at the time due to vacant periods between rentals is not important. You cannot claim interest against income while you were living there (but if you were living there you wouldn't have been receiving rental income for it either). On the relevant property page you indicate the period that it was being rented out - if you made a loss in any year, that is carried forward into the next financial year, if you made a profit, you would have to pay tax at your top rate for that period that was in force at that time (assuming that it didn't take you into a higher tax band relevant in that tax year, in which case, it would be the higher rate).

Remember you can claim other legitimate expenses for the same period - therefore if you were also paying insurance on the property you can claim that, redecoration etc to keep the property maintained, plus any maintenance costs, gas landlord safety checks etc.

The forms are relatively straightforward but as was mentioned above, if you are having to back date all your forms it may be worth getting an accountant (or one of the specialist ones dealing with tax investigations) to check them in case there are any legitimate expenses that you are missing that you could provide proof for (and can claim the cost of the accountant from tax liability ...).

Good luck

Anon

fengirl_2

You need the help of an accountant. HMRC can impose a penalty of up to 100% of the tax lost, plus interest, plous penalties for late returns. An accountant can negotiate on your behalf with HMRC in order to mitigate the penalty.