Just found out I owe tax - I'm afraid of the fine

macmomo

they said I don't need to do a tax return after all as the profit has been less than £2500; we wrote a letter giving an amount of profit or loss for each year for the 3 years. They didn't want any details at all, just an amount. Overall, I think we are about £2000 in profit, divided between the two of us gives £1000 each that we owe plus fine, whatever that may be (hoping for clemency as we came forward) and interest I presume.

As for the accountant - I contact 3 companies in my local area, all of which quoted £150-200 per tax return per year per person, i.e. not far off £800-1000 to do 3 years of tax returns for a married couple. We can't afford that, not with the the tax bill on top. I doubt they would have saved us that amount.

Thanks for the assistance, everyone. Now to look at selling a limb/vital organ to pay the bill.

Mikeyorks

macmomo wrote: »

divided between the two of us gives £1000 each that we owe plus fine, whatever that may be

There shouldn't be a fine - as they're not doing it via SA, from what you've posted?

So they must be doing it via PAYE. And - may be able to code it out. Which means you will pay it monthly over a year. If that's the case - no interest either.

macmomo

Thanks for that hope! Yes, they said they would do it via PAYE. If not, we've identified some things to sell to cover some of the cost.

I have no idea how people make money out of renting out their homes - the rent we have to pay on the place we live in is almost as much as the money coming in in rent from our tenants so when you take into account maintenance etc we would have been thousands of pounds better off to have just sold the house. And we don't have a buy to let mortgage either, just a normal offset interest-only one as our bank was happy for us to let the house out under the same mortgage.

Thanks again for the help and advice.

jimmo

Mikeyorks wrote: »

There shouldn't be a fine - as they're not doing it via SA, from what you've posted?

So they must be doing it via PAYE.

It may not be as simple as that.
Whilst the profits declared in your letter to HMRC may be within the limits for the income to normally be dealt with by way of PAYE adjustments, there is also a clear case of Failure to Notify (2 cases if the property is jointly owned.
The Service side of HMRC should pass the matter over to Compliance to consider enquiries.
Failure to Notify cases do not require S A Returns because the very existence of taxable income (that has not been notified) is sufficient.
If the HMRC target system is anything like it was in my days then the situation presents a relatively straight forward Enquiry (or 2) with a guaranteed yield of tax, interest and perhaps, penalties.
Whilst there certainly is hope for the OP that HMRC will simply make PAYE adjustments, it is not definite until you get something in writing from HMRC.
Sorry.