Scared to admit to tax mistake!

POPPYOSCAR

I don't understand why the poster who gave advice earlier about not putting the fact down that this is joint rental income said this, if he is an accountant.

Perhaps they could explain?

chrismac1

Question : how many people in this post think anyone in HMRC actually reads tax returns any more? My answer to that is they don't. So you're not really giving them any extra information by ticking that joint box, it's not as if this is a partnership return where you're putting down both UTRs and if UTR 1 and UTR 2 don't add up the database is going to identify that.

Incidentally the fact that tax returns are no longer read is very useful. I use the "Other information" box on a regular basis for "insurance" purposes to cover potential enquiry issues. Then at least if there is an enquiry and the first question is "Why have you not disclosed this?" you can safely answer "Here is a printout of the notes to the tax return where we disclosed this, don't you read these?"

Al_Ross

So is the information that is on a tax return all worked out on an automated software programm ,and your tax owed worked out from that ?

POPPYOSCAR

chrismac1 wrote: »

Question : how many people in this post think anyone in HMRC actually reads tax returns any more? My answer to that is they don't. So you're not really giving them any extra information by ticking that joint box, it's not as if this is a partnership return where you're putting down both UTRs and if UTR 1 and UTR 2 don't add up the database is going to identify that.

Incidentally the fact that tax returns are no longer read is very useful. I use the "Other information" box on a regular basis for "insurance" purposes to cover potential enquiry issues. Then at least if there is an enquiry and the first question is "Why have you not disclosed this?" you can safely answer "Here is a printout of the notes to the tax return where we disclosed this, don't you read these?"

You are not making sense to me.

On one hand you are saying that you do not need to disclose it and on the other you are saying that you use the 'other information' box as insurance? So in fact this information is being entered on the tax return.

chrismac1

The "insurance" is there precisely because the tax return is not going to be read. You are disclosing information which can give you protection at a later date - which might be up to 6 years later - if an enquiry is launched.

sunshinetours

Ultimately its the tax payer who signs the tax return to say the iinformation is correct. If it turns out not to be correct and the tax payer then asks their accountant why isn't it correct, its then down to the accountant to explain that to HMRC/the tax payer.

The risk if your return is prepared by a qualified person then the argument of accidental mistake doesn't always wash under the new penalty system as a higher level of base knowledge is (rightly) assumed. This is why addditional information box can be used to detail certain circumstances such as Chrismac1 has mentioned - and its often true that HMRC do not "read" these additional information boxes or any separate documents sent in with returns as many pointless "enquiries" will testify.

The best options is obviously to ensure the correct boxes are ticked in the first place

OP you will need the proper calaculations of teh rents receioved before any deductions and then the relevant mortgage interest deduction, magagin agent fees, repairs, inusrance etc all split down to each tax year (ie round to each 5th April). Only then will you have enough information to approach this

NicChanna

Well ... I did it.

I called HMRC this lunch time and explained everything. Spoke to a nice woman first who listened well and asked good questions that helped me to explain the situation.

When it got complex, I was put through to a senior technical adviser who was just as great. He said (as many people here have said!) that I need to get exact figures together for all the years concerned. He also clarified that I wont be going to jail for this and I wont be fined. I will be asked to pay any tax I've been liable for and the interest on top.

I have to write in to them with all the details for last tax year that I can muster, and they'll work out how much tax they think I owe. They might choose to alter my tax code to recover it or they might have me do a full tax return. For the other years before, they will send me forms to complete in due course.

Happily I've also just received an email from my ex-husband about an hour ago with some more details. It shows that the mortgage is interest only and it shows the monthly amount for landlord insurance and also that we pay someone (ex-FIL) a small amount per month to do maintainance. It also shows the exact amount that comes from that property in rent.

It shames me to think that I have never known what any of these amounts are, who they are paid to, or that we even paid for maintenance at all. Thank goodness I'm starting to grow up financially ...

I was really nervous about making the call and was actually nearly crying for part of it because I felt so ashamed about not knowing what to do, or that I should have been doing it all this time.

I hope this is going to turn out well, am going tonight to draft a letter with as much detail as I have for 2010/2011 and send it off quicksmart.

Bit of a big post here but thought I'd let you know how it has gone so far.

sunshinetours

Well done for making the call!

chrismac1

Credit where it's due - fine effort from HMRC there, we need more of this!

NicChanna

Update: Posted letter away to HMRC on Monday, now waiting on a reply ...