HMRC letter

theartfullodger

Very pleased to hear HMRC are pursing such cases where it may be worth further investigation.

But don't think I'm blaming you as wrong in everything..  Some 15 years ago I'd not done any returns for at east 5 years, no valid excuse or reason. Ended up with two large burly gentlemen knocking on my door: Demanding funds immediately. They looked extremely surprised when I agreed to pay, got out my cheque book (that far back..) and gave them cheque..thinking if they dropped it it would go boing....  Then there was 5+ years of tax returns to do and very very little by way of records or things in my memory.  Bad idea, don;t go there. Engage an accountant specialising in landlord returns, do your best and keep up-to-date in future..   We all make mistakes, but pay for them (usually) later.... 

Hoenir

theartfullodger said:

Very pleased to hear HMRC are pursing such cases where it may be worth further investigation.

HMRC have a task force addressing the issue of undeclared property income. 

_Penny_Dreadful

StevieB99 said:

I received a letter from HMRC at the beginning of last year concerning a property I rented out. I had been ill for several years and did not fill any self assessments out.(it was the last thing on my mind-go easy on me please)
I went on the HMRC website and filled everything out and paid what was due. I gave my reasons for not declaring etc and they stated "We have accepted your reasonable excuse-there are no penalties to pay.'
I received a letter stating acceptance of my 'reasonable excuse' but the figures they sent were not correct. I replied with the correct figures. 
Now it took them 13 months to get back to me today stating they have reviewed the case and have decided that my 'reasonable excuse' may not be valid and it was a mistake! They have now gone back 7 years instead of the standard 4 plus interest up to today and whatever the penalty is that they decide on. They have sent me a demand for the additional funds.
They are asking for doctors reports and the missing years now.

Can anyone advise whether they can just change there mind like this? Seems a bit over top considering it took them 13 months to reply.
I must stress I have been cooperative the whole way through this. They are stating I don't have to reply and then they will make their own decision.
Any legal help please?

Thank you all in advance

I have been tangoing with HMRC for years and 13 months for a reply is actually quite quick.  I’m guessing you declared the rental income via the Let Property Campaign and depending on your circumstances HMRC can go back further than 4 years. 

My advice is to gather the information HMRC has requested and go and see your MP.  My MP seems to have a secret thistle whistle to get a response from HMRC quickly and has been instrumental in helping me deal with them. 

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

Olinda99

SonnyLumiere said:

There is a great deal of nonsense in some of these replies. Quotes are from HMRC's Compliance Handbook (CH).

Hoenir: "Nor is 4 years standard". HMRC: "The normal time limit of 4 years applies to all taxes." (Other limits may apply if the taxpayer's non-compliance is not "careless", e.g. deliberate)

Hoenir: "HMRC can assess back to when the non declaration commenced". As a general statement this is wrong. How far back HMRC can go depends on "behaviour" - see page CH56100 of CH manual.

Hoenir: "Then failure to declare the income from the start is likely to be treated as evasion". No, if the "behaviour" was deemed "careless" this is not treated as evasion.

Olinda: "if it goes badly for you then you could be looking at a criminal record." No! For this level of non-compliance, the result will be a contract settlement to cover tax due, plus penalty, plus interest. Such settlements (the vast majority) are civil not criminal. Olinda: If you don't understand how HMRC operate then please do not post such alarmist nonsense.
https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch56100

I am surprised you say this. If (as I asked) the OP submitted incorrect SAs for 7 years (deliberately omitting rental.income) then this is tax fraud. 

HMRC have the option to prosecute if they want to send a message to the rental sector.

I would suggest you educate yourself by googling, but for example

https://aa-accountants.co.uk/consequences-of-not-declaring-rental-income/

you will also find examples of people being prosecuted for failing to declare rental income with some even being jailed (although to be fair this is for quite substantial amounts)

deannagone

I would hope that people remember this forum is to provide advice, not judgement.  It is no business of ours what sort of illness the OP had/has, particularly the way the question has been posed.  

silvercar

I think OP is trying to get opinions on whether hmrc can send a letter accepting the “reasonable excuse” as valid and then be allowed to change its mind on that. 

No one is arguing whether hmrc is right to hunt down unpaid tax, it’s whether they can change previous decisions they have made.

mybestattempt

Olinda99 said:

SonnyLumiere said:

There is a great deal of nonsense in some of these replies. Quotes are from HMRC's Compliance Handbook (CH).

Hoenir: "Nor is 4 years standard". HMRC: "The normal time limit of 4 years applies to all taxes." (Other limits may apply if the taxpayer's non-compliance is not "careless", e.g. deliberate)

Hoenir: "HMRC can assess back to when the non declaration commenced". As a general statement this is wrong. How far back HMRC can go depends on "behaviour" - see page CH56100 of CH manual.

Hoenir: "Then failure to declare the income from the start is likely to be treated as evasion". No, if the "behaviour" was deemed "careless" this is not treated as evasion.

Olinda: "if it goes badly for you then you could be looking at a criminal record." No! For this level of non-compliance, the result will be a contract settlement to cover tax due, plus penalty, plus interest. Such settlements (the vast majority) are civil not criminal. Olinda: If you don't understand how HMRC operate then please do not post such alarmist nonsense.
https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch56100

I am surprised you say this. If (as I asked) the OP submitted incorrect SAs for 7 years (deliberately omitting rental.income) then this is tax fraud. 

HMRC have the option to prosecute if they want to send a message to the rental sector.

I would suggest you educate yourself by googling, but for example

https://aa-accountants.co.uk/consequences-of-not-declaring-rental-income/

you will also find examples of people being prosecuted for failing to declare rental income with some even being jailed (although to be fair this is for quite substantial amounts)

I'm sorry, but I feel it's you who needs to be more educated in tax matters.

@SonneyLumiere has referred you to HMRC guidance. That will give you far more insight on the tax legislation about the penalties HMRC can impose for failure to notify chargeability to tax and making incorrect tax returns than you appear to have.

StevieB99

silvercar said:

I think OP is trying to get opinions on whether hmrc can send a letter accepting the “reasonable excuse” as valid and then be allowed to change its mind on that. 

No one is arguing whether hmrc is right to hunt down unpaid tax, it’s whether they can change previous decisions they have made.

Correct, that is all i'm asking. As usual people don't know all the facts and jumping in for the kill. lol 

Hoenir

StevieB99 said:

silvercar said:

I think OP is trying to get opinions on whether hmrc can send a letter accepting the “reasonable excuse” as valid and then be allowed to change its mind on that. 

No one is arguing whether hmrc is right to hunt down unpaid tax, it’s whether they can change previous decisions they have made.

Correct, that is all i'm asking. As usual people don't know all the facts and jumping in for the kill. lol 

Why should the HMRC walk away from collecting unpaid tax which has been identified?   Not a game of catch me if you can. Ultimately the HMRC's powers extend back up to 20 years.  Have you sought the advice of an accountant? 

SonnyLumiere

Olinda99: thanks, but I don't need to Google it. I'm informed by my over 20 years of experience working as a Compliance Officer (we used to be called Tax Inspectors) in HMRC, recently retired. I worked some of these cases. Do you even know what a Contract Settlement is? Yes, HMRC does prosecute, but not this sort / level of case. I don't like it when people don't pay their tax, but you seem to have some sort of axe to grind. It would be better if you retired from this thread.