HMRC Let Property Campaign

MizzMunnypenny

purdyoaten2 said:

As an aside - who on earth advised that a return ‘was not required’ due to a loss incurring? Was it HMRC? How could losses be carried forward if not declared?

As returns have not been submitted there could well be little possibility of having the losses of £7k relieved. Does the estimated new liability include losses brought forward? I would strongly advise that professional advice is sought.

Oh god - what a mess - I will definitely seek professional advice! 

I submitted tax returns from 02/03 through to 07/08 and was paying the tax owed through PAYE. In 07/08 I had made a £2700 loss and declared this. The letter I got back from HMRC in Dec 08 says 'we do not propose to send you returns in the future. However, if there have been any changes in your financial circumstances, or they change in future, then you must let us know."

As I then made losses for the next three years after that, I didn't think to report them (as I was already making a loss when HMRC said I didn't need to do any more returns). I have carried the losses forward and offset them when I started making profit, but again didn't report them as I thought I was 'in credit'. After going p/t at work the rent plus my wages didn't meet my tax code, so as there would be no tax to pay, again, I didn't report to HMRC.

It's only now the rules have changed re offsetting mortgage interest and my wages have gone up due to increased hours and a pay rise, that I realise I need to make a disclosure to HMRC to cover the last 3 tax years.

I don't make an awful lot from the property - I don't see it in terms of profitability - I'm probably only keeping it on for sentimental reasons as it was my first house and my daughter may wish to live there as a stepping stone when she leaves home! It's a tiny 1 bed house in the north of England where rent is low.  

Thrugelmir

MizzMunnypenny said:

purdyoaten2 said:

As an aside - who on earth advised that a return ‘was not required’ due to a loss incurring? Was it HMRC? How could losses be carried forward if not declared?

As returns have not been submitted there could well be little possibility of having the losses of £7k relieved. Does the estimated new liability include losses brought forward? I would strongly advise that professional advice is sought.

I don't make an awful lot from the property - I don't see it in terms of profitability 

That's why my question regarding the type of mortgage you have is important. As I fear the worst. Mortgage interest rates having fallen considerably since 2002. Your profit is far far too low.............

[Deleted User]

MizzMunnypenny said:

purdyoaten2 said:

As an aside - who on earth advised that a return ‘was not required’ due to a loss incurring? Was it HMRC? How could losses be carried forward if not declared?

As returns have not been submitted there could well be little possibility of having the losses of £7k relieved. Does the estimated new liability include losses brought forward? I would strongly advise that professional advice is sought.

Oh god - what a mess - I will definitely seek professional advice! 

I submitted tax returns from 02/03 through to 07/08 and was paying the tax owed through PAYE. In 07/08 I had made a £2700 loss and declared this. The letter I got back from HMRC in Dec 08 says 'we do not propose to send you returns in the future. However, if there have been any changes in your financial circumstances, or they change in future, then you must let us know."

As I then made losses for the next three years after that, I didn't think to report them (as I was already making a loss when HMRC said I didn't need to do any more returns). I have carried the losses forward and offset them when I started making profit, but again didn't report them as I thought I was 'in credit'. After going p/t at work the rent plus my wages didn't meet my tax code, so as there would be no tax to pay, again, I didn't report to HMRC.

It's only now the rules have changed re offsetting mortgage interest and my wages have gone up due to increased hours and a pay rise, that I realise I need to make a disclosure to HMRC to cover the last 3 tax years.

I don't make an awful lot from the property - I don't see it in terms of profitability - I'm probably only keeping it on for sentimental reasons as it was my first house and my daughter may wish to live there as a stepping stone when she leaves home! It's a tiny 1 bed house in the north of England where rent is low.  

As I suspected but at least there are £2700 of losses ‘claimed’. Definitely worth seeking professional advice. Any reputable tax advisor will be able to negotiate with HMRC in a manner with which you would not be familiar and the whole stress element eill reduce significantly. (I wouldn’t give up on those losses just yet) I would also advise not to worry too much - there really doesn’t seem to be much in this other than tax geared penalties.