Time to get tax affairs in order ...

foolishboy

My wife owns a flat, owned it long before we met. She lived in it until around 5 years ago and it has been mostly tenanted since then.

She was given poor advice over the years, was told that as she didn't make a profit (after property maintenance fees etc..) that she didn't owe tax and therefore didn't have to do anything. This is of course wrong.

I'm in the process of compiling information regarding income/expenditure on the property for the period since she moved out but was after some pointers on the following:

- Outline of what income/expenses I should be focussing on
- How to start the process of getting things in order with HMRC
- Whether I should seek professional help with this or is it DIYable?

..I consider myself fairly savvy but appreciate this can be a complicated business.

Also, how big a slap on the wrist are we looking at here? Fines?

Cheers!
FB

Xutl

foolishboy wrote: »

My wife owns a flat, owned it long before we met. She lived in it until around 5 years ago and it has been mostly tenanted since then.

She was given poor advice over the years, was told that as she didn't make a profit (after property maintenance fees etc..) that she didn't owe tax and therefore didn't have to do anything. This is of course wrong.

I'm in the process of compiling information regarding income/expenditure on the property for the period since she moved out but was after some pointers on the following:

- Outline of what income/expenses I should be focussing on
- How to start the process of getting things in order with HMRC
- Whether I should seek professional help with this or is it DIYable?

..I consider myself fairly savvy but appreciate this can be a complicated business.

Also, how big a slap on the wrist are we looking at here? Fines?

Cheers!
FB

You'd be completing an Income from Property page for each year (as well as the rest of a tax return).

Take a look at one here: http://www.hmrc.gov.uk/forms/sa105.pdf

Page 2 is really what you need to look at. The rent received and the expenses incurred. There are help notes that go with it here:
http://www.hmrc.gov.uk/worksheets/sa105-notes.pdf

I'd call HMRC on 0845 3000 627 (Your wife would have to call if it's her income). They would then arrange the issue of the self assessment returns to you.

The forms are fairly straightforward. You can ask for help from the helplines or make an appointment at your local office for help completing them.

As for fines, that would be down to the office. You may well get away with no fine until 2010/11 if no extra tax was due. The rules changed for 2010/11 though and late filing penalties were introduced even if you didn't owe money. - You can always appeal against any penalty imposed stating your reasons for not informing HMRC sooner.

Good Luck!:)

pjclar02

If the property has been loss making and there is no tax to declare, then there is a possibility that there is no requirement to submit tax returns.

mrsbag1

Hi,

I have a similar situation, I have rented out my flat since 2010 till now and I didn't know that I had to declare it. I make approx 50 - 100 quid a month profit but it balances out as I have factors bills and I am always buying things to make the flat nicer or got a tiler into do the bathroom last year.
I have just found out I shoudl have been keeping receipts and declaring it. Should I just phone the tax office and declare it all?
I have had a storage unit which I keep furniture the tenants didnt want at £53 a month - can I use this as an expense? I have receipts for this. Can i claim on Factors and Internet bills?
I am totally baffled with this - i've read the info on the tax fix website but really not sure what to do..
Please help... thanks