Please Help - What can he do?

evoke

The issue is that she knows a criminal offence is being committed, and that in itself is a crime as she's effectively financially benefitting from tax evasion, albeit indirectly.

poppysarah

evoke wrote: »

The issue is that she knows a criminal offence is being committed, and that in itself is a crime as she's effectively financially benefitting from tax evasion, albeit indirectly.

Well sort of snitching him up, dragging him to an accountant and making him get sorted it the best she can do.

If she wants to stay out of it she could throw him out and divorce him stating his illegal actions are unreasonable behaviour *and* snitch him up.

TrickyDicky101

evoke wrote: »

The issue is that she knows a criminal offence is being committed, and that in itself is a crime as she's effectively financially benefitting from tax evasion, albeit indirectly.

There is insufficient information to make that conclusion. If there is no tax to pay due to any rental profits being within both her and her husband's personal allowance, then no crime has been committed.

JanetRutherford

Please excuse the delay in replying but I have now spoken to HMRC, annonymously, about my husband and they are stating 20% is what we will have to pay for each year's earnings from the two flats.

This works out at approximately £20,000 per year earnings/profit because my wages and my husbands income combined have paid for everything else (I was earning £1,500 a month, and he was earning £10,000 a year, so the flats rents were pure profit).

So could someone please tell me, or work out for me, what 20% is from an accountants/tax mans point of view?

Also, my husband wants to speak to an accountant first to see if they have a way around this, whereas I prefer to come clean with the tax man (hmrc). So which way should I proceed? Can an accountant get a lesser option for me or is it a clear cut case of paying 20%. Please help me because I am no accountant.

Thank you for your help and suggestions so far.

Yours Sincerely

Janet Rutherford

sonastin

Its unlikely to be pure profit because you should have had some expenses in connection with running the flats - mortgage interest if you had a mortgage, cost of repairs and maintenance, costs associated with finding and signing up tenants, etc. All of these costs can be subtracted from the income and you only pay interest on the difference.

Speak to an accountant. HMRC won't necessarily see this as trying to avoid paying tax. Your accountant can help you calculate how much tax is actually owed and help you to fill out the forms in a way that won't get HMRC asking more questions than necessary.

anselld

Not sure how many more people need to advise you to get an accountant.
You will still be coming clean with the tax man, but it will be with informed professional support to make sure you pay the correct amount. They will not "find a way round it", they will just make sure you can claim legitimate expenses and pay what is actually due.

Accountant_Kerry

an accountant 'won't find a way round it' they will come totally clean in the most tax efficient manner, if an accountant lies on your behalf they can be ejected from their membership of their profession so this is not what they are about.

as my previous post an accountant will make sure you claim all allowable expenses against the income and will submit the appropriate returns for you. expect to pay several hundred pounds for this but a good accountant will save you more than this in their knowledge and ability to be tax efficient for you.

you will not have all the rent as pure profit, as you will have expenses and probably mortgage interest. income(rent) less allowable expenses = taxable income. taxed at 20% by the looks of it.

if your taxable income really is £20k a year then you will need to pay at least £4000 a year in tax plus interest, so if you can't raise this money you will probably need to sell the properties, whatever figure your accountant comes to you will need to pay it sooner rather than later.

poppysarah

JanetRutherford wrote: »

. Please help me because I am no accountant.

Thank you for your help and suggestions so far.

Yours Sincerely

Janet Rutherford

Speak to one.

Now.

Gwhiz

Slightly off topic but WHY were you forced to buy the house you were renting? Why not rent another property?

Something does not quite add up here!!!

sonastin

Gwhiz wrote: »

Something does not quite add up here!!!

Like

I ... have lived in my house for 8 years

10 Years ago we were forced to buy the house we were renting

She can't have been living their for 8 years when she bought it 10 years ago having been renting it prior to that.
It was only this bit...

2 Years ago we sold the ground floor flat

That made me realise the numbers were OK, it was the words around them that were confusing.