Tax or no tax

Emlmrtnz

I need some advice, i keep going around asking my self if you need to inform your tax office that you loss money by letting your property, every where i look it says if you earn more or less than £2500 but nothing if you are on negative. And what about this P180 form? i can find it!:eek:

Fire_Fox

You need to complete a tax return if you let a property, regardless of whether you make a profit or a loss. Which tax year is this for? Have you tried ringing the inland revenue?

Sammy85_2

Complete the tax paperwork regardless of whether you've made or lost money. You'll get a letter back saying you owe nothing.

If you dont do the paperwork you'll get a fine, even if there is nothing to pay.

silvercar

Sammy85 wrote: »

Complete the tax paperwork regardless of whether you've made or lost money. You'll get a letter back saying you owe nothing.

If you dont do the paperwork you'll get a fine, even if there is nothing to pay.

You won't get a fine if there is nothing to pay and the inland revenue hasn't demanded you complete a tax return.

If you are making a loss, you should declare it on your tax return. The loss can be carried forward to next year. It can be put against any rental profit you have next year but not against earned income.

Sammy85_2

silvercar wrote: »

You won't get a fine if there is nothing to pay and the inland revenue hasn't demanded you complete a tax return.

If you are making a loss, you should declare it on your tax return. The loss can be carried forward to next year. It can be put against any rental profit you have next year but not against earned income.

Sorry, what i said obviously wasnt clear:

If you do not do a tax return (and you get caught) you will get a fine regardless of whether you owe any tax on what you havent declared.
If you do the tax return volutarily, of course you wont get fined.

Thrugelmir

silvercar wrote: »

You won't get a fine if there is nothing to pay and the inland revenue hasn't demanded you complete a tax return.

If you are making a loss, you should declare it on your tax return. The loss can be carried forward to next year. It can be put against any rental profit you have next year but not against earned income.

Its never been the case that the HMRC demand you complete a tax return. The onus is on the taxpayer to ask for a tax return and declare their earnings, and if applicable trading losses in any tax year.

silvercar

Sammy85 wrote: »

Sorry, what i said obviously wasnt clear:

If you do not do a tax return (and you get caught) you will get a fine regardless of whether you owe any tax on what you havent declared.
If you do the tax return volutarily, of course you wont get fined.

This is just not true. If you have no tax to pay and the revenue have not told you to complete a tax return, you are under no obligation to do so.

From the direct gov website:

"Income above a certain level from savings, investment or property

If you don't already complete a tax return, you'll need to do so if you receive any of the following:

income from savings and investments of £10,000 or more
income from untaxed savings and investments of £2,500 or more
income from property (before deducting allowable expenses) of £10,000 or more
income from property (after deducting allowable expenses) of £2,500 or more
annual trust or settlement income on which tax is still due (even if you're only treated as receiving this income)
income from the estate of a deceased person on which tax is still due"


So if the income is less than £10,000 before expenses and the profit is less than £2,500 you have no need to complete a tax return (unless you already do so).

ET1976

silvercar wrote: »

So if the income is less than £10,000 before expenses and the profit is less than £2,500 you have no need to complete a tax return (unless you already do so).

Sorry to hijack the thread, but in the above case, how do you go about paying the tax owed if you don't complete a tax return?

Gwhiz

ET1976 wrote: »

Sorry to hijack the thread, but in the above case, how do you go about paying the tax owed if you don't complete a tax return?

I THINK it's a case of "if you are not doing a tax return anyway, your income is low enough that you are not liable for tax even with a property profit of under £2500"

I could be wrong though!

ET1976

no, that can't be it, I don't have to do a tax return for my 9-5 job but I earn enough to have to pay tax on my rental profit.

Sammy85_2

Is your 9-5 job PAYE? If so you wouldnt fill in a tax return, its taken automatically at source.