Tax

theartfullodger

Welcome to MSE


Which part of Income Tax didn't give understand about needing declare you income from rental?

I 'ates tax & benefit fiddlers, be they landlord, agent, tenant, MP etc etc etc...

Because of people doing this sort of thing those that need help from the state get less than they might.

Hasbeen

Freespirit38 wrote: »

Hi all,
I’m in a bit of a pickle here and need some advice please. I have a buy to let mortgage and have been renting out the flat for the past 10 years. I wasn’t advised that I need to declare this as an income. My flat is now being sold and I’m worried about the tax I need to pay now and all the backdated tax which I’m willing to do. If I’d known about this before I would have. Please advise what consequences I would face ☹️

You have got yourself into a mess!

Is the house still occupied?
How was the rent paid, cash or into bank?
Where have you been living rental or owned?
I assume you have not registered in any council landlord schemes?


You can do two things?

Sell house and hope HMRC do not find out. If they do you will be in a bigger mess!!

Contact HMRC asap and plead stupidity, pay all that is owed.


Renting out a property for 10 years with not a clue regarding landlords responsibilities and legal requirements. And your now worried about tax!! You could have ended up facing manslaughter charges, if anything happened to your tenant.:(

agrinnall

00ec25 wrote: »

i am intrigued why the OP has, for the last 10 years thought that he did not have to pay tax on rent when every year there are posts on here explaining that you do and there are plenty of high profile news stories about people who were caught

I would guess that as the OP has only just joined MSE and only made 1 post that he hasn't spent the last 10 years glued to either the Housing or Cutting Tax boards, where he might have seen such threads.

bris

10 years of back tax, interest and penalties, your going to need a lot of money.


You will be lucky to escape a tax avoidance charge, escaping it, if lucky, usually depends on your ability to pay what you owe in full.


There is of course the fact you will need to also pay tax on any profit you make on the flat, less allowances, so I hope you have deep pockets.

00ec25

agrinnall wrote: »

I would guess that as the OP has only just joined MSE and only made 1 post that he hasn't spent the last 10 years glued to either the Housing or Cutting Tax boards, where he might have seen such threads.

indeed, I did think about rewriting it even before posting but:
a) he may be an alter ego
b) it is still the summer holidays
c) he may be genuine, in which case he does not pay attention to the wider world's news or (apparently) have cared one bit over the last 10 years to even think should he find out what being a LL entails, in which case see artful's post @ #12
or
d) he should start here:

https://www.gov.uk/government/publications/let-property-campaign-your-guide-to-making-a-disclosure/let-property-campaign-your-guide-to-making-a-disclosure

CIS

Have the council tax dept been made aware that the property was tenanted ?

kingstreet

Freespirit38 wrote: »

I wasn’t advised that I need to declare this as an income.

You should immediately make a complaint to the organisation you paid to advise you.

Freespirit38

No, HMRC were not aware this was on rental.. guys I really didn’t know. I was occupying the flat myself for a good few years. I’m willing to pay all the back dated tax. I know that I would need to pay CGT - will they ask me where this money has come from ?
I’m going to seek advice soon . ☹️☹️☹️

Freespirit38

Ive just joined hence me asking 🙁🙁🙁

Bossypants

Freespirit38 wrote: »

will they ask me where this money has come from ?

The proceeds from the sale or the income you received when letting it out?

You really need to inform HMRC of the situation, either directly or through an accountant. Not only is it ethically the right thing to do, but if you don't, you'll be looking over your shoulder for years to come, and if they do eventually catch you, you'll likely take more penalties for wilfully hiding it even though you now know you liable for tax.

Don't panic and don't beat yourself up too much (it won't do you any good), but do seek advice and look to get this resolved in the correct manner asap.