HMRC Let Property Disclosure - need help!

lptbear

Hi,

I have been letting a property for the last few years. The rental income is around 6k to 7k per year, and I have no other income.

My understanding was that, as I was under the (10k) personal tax allowance threshold for paying tax, I did not have to file a tax return, as I did not need to pay any tax.

I have now been asked by HMRC to provide details of the rental income as part of the property let disclosure campaign.

What I need help with is...as I do not owe any tax, how do I work out what amount I need to pay for the penalties? 

My understanding is that the penalty amount is a percentage of the tax that has not been paid. 

Thanks for your help.

lpt

mybestattempt

Give HMRC the information they are asking for and tell them why you believe no tax is due.

If no tax is due then there won't be tax related penalties.

If they decide you were liable to tax they will assess the tax due and any penalties chargeable with detailed explanations of how they have calculated the figures and how to appeal if you don't agree.

Bookworm105

you literally have no other income except the rent? 
is it rent from letting a property or is it rent from having a lodger (the distinction is important)?

if from a property then that is a very low rent, why not just sell up?
do you actually live off a partner's earnings, as no one has zero other income ? 

as above, tell them the info they asked for. If no tax is due then no tax related penalties can be applied either.

However, if your net profit from the property is more than £2,500 per year you were required to submit a tax return anyway, so you may face a non filing penalty irrespective of the fact no tax is due.
Check if you need to send a Self Assessment tax return - GOV.UK (www.gov.uk)

Dazed_and_C0nfused

Bookworm105 said:

you literally have no other income except the rent? 
is it rent from letting a property or is it rent from having a lodger (the distinction is important)?

if from a property then that is a very low rent, why not just sell up?
do you actually live off a partner's earnings, as no one has zero other income ? 

as above, tell them the info they asked for. If no tax is due then no tax related penalties can be applied either.

However, if your net profit from the property is more than £2,500 per year you were required to submit a tax return anyway, so you may face a non filing penalty irrespective of the fact no tax is due.
Check if you need to send a Self Assessment tax return - GOV.UK (www.gov.uk)

What "non filing" penalty are you referring to 🤔

The ones commonly referred on this board are £100 penalties where HMRC have issued a return or notice to file a return and it wasn't submitted by the filing date.

If a return or notice to file hasn't been issued then a £100 non filing penalty cannot be imposed as you can't be fined for not completing a return you haven't been asked to complete.

Hoenir

lptbear said:

I have been letting a property for the last few years. The rental income is around 6k to 7k per year, and I have no other income.

Then you've nothing to fear. Comply with the request. Job done. However I will add the caveat that they know far more about your financial affairs than you'd imagine. Acting dumb is fraught with consequences. 

lptbear

Thanks for your help everyone who has replied.

My partner works and I stay at home and look after the children, so I don't have any other income.

Also, I am not hiding anything. I am disclosing all the income from the property rental. I am willing to pay any penalties that are due, as I realise now that I should have informed HMRC of the rental income if it's between £2,500 and £10,000.

Can anyone provide more details of the non-filing penalty?

Thanks again

lpt

[Deleted User]

lptbear said:

Thanks for your help everyone who has replied.

My partner works and I stay at home and look after the children, so I don't have any other income.

Also, I am not hiding anything. I am disclosing all the income from the property rental. I am willing to pay any penalties that are due, as I realise now that I should have informed HMRC of the rental income if it's between £2,500 and £10,000.

Can anyone provide more details of the non-filing penalty?

Thanks again

lpt

DazedandC0nfused has already indicated that there won’t be a non-filing penalty as no returns were issued. This is correct.