Will tax office fine me for not declaring income several years ago?

pastpresentfuture

Several years ago, I failed to declare some additional income against a buy to let property. At the time, I didn't think it was necessary because I made a loss on the property (in terms of rental against mortgage and expenses). Over the years, I've learnt that I should have in fact declared the income even though I made a loss. I want to approach hmrc but I wonder what penalities they might impose on me.

agrinnall

I doubt if they will fine you, particularly if there was no tax to pay. I would just ring them up and ask what they want you to do, you've got to face it some time so the sooner the better.

chrismac1

Agreed. However if over 6 years ago then you are in the clear in any case.

antrobus

chrismac1 wrote: »

Agreed. However if over 6 years ago then you are in the clear in any case.

The Limitation Act 1980 does not apply to "any proceedings by the Crown for the recovery of any tax or duty" so I wouldn't bank on that.

pineapple

agrinnall wrote: »

you've got to face it some time so the sooner the better.

Not necessarily. They aren't guaranteed to catch up at all. I made a similar mistake a few years back. In fact I am not sure whether I owe anything anyway. But I am not about to go put my head on a plate. If I get queried about it I'll deal with it then.

chrismac1

You have 2 options:

1. File something. Hopefully you'll fill it in correctly. Hopefully no-one in HMRC will add 2 plus 2 to make 5 and then give you a load of hassle and erroneous bills as a result. Just look up a few threads on here, this happens depressingly frequently at present. You may end up getting asked for an SA return for several years into the future.

2. Let sleeping dogs lie. This will result in the same tax take for the country as option 1. It will also save the country creating a tax database record for no good reason, with all the expense, letters sent out and so on which goes with that.

Either way in my view your conscience is clear.

jimmo

The following thread relates to Capital Gains Tax but the principles are the same for lettings.
https://forums.moneysavingexpert.com/discussion/2915004

If you have only made losses from letting you have absolutely no obligation to inform HMRC.

If you are continuing to let the property it could be a good idea to declare your losses so that they can be used to reduce the tax on any future profits.