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Due to my total naivety and inexperience I've not declared my rental income on my property since I've been renting it out from March 2013.The numbers I'm talking about aren't very big (numbers are after allowable expenses, mortgage interest, repairs, letting agents fees etc)
2012/13 £406 loss
2014/15 £18 loss
Making a net taxable profit of £1047 taking the previous years losses into account?
I'm a basic rate taxpayer with a salary of 32k.I've been trying to fill out the digital disclosure form tonight but I'm totally stuck at the first hurdle. The form asks you to enter the penalty you should pay and interest? Doesn't the HMRC decide that? I've got detailed spreadsheets for retal income/profit/loss but I've got no idea how to proceed with it. Anyone have any ideas? The calculator they provide doesn't make much sense to me either. When I input each years figures in it comes back with no tax owed, which can't be right, but when I put the figure of £1047 into one year's calculations it comes back that I owe over £1700 - again that can't be right as 20% of the £1047 figure is £209?I thought it would be a simple case of entering the figures I've got and HMRC would take it from there but they don't make it easy for newbies like me. I desperately want to get this in order, I can't afford an accountant at the moment, I simply don't have the money, despite it being an allowable expense.
Any advice would be greatly appreciated my head is ready to explode!
Generally the minimum penalty they will accept is 10% in these cases.
For interest you should be able to calculate here https://www.hmrc.gov.uk/gds/campaigns/19years-calc-stub.htm
Director of Tax Peplows Limited
CTA ACA FCCA
I just can't get the calculator to come up with figures that look remotely correct, that's my problem. When you type in your salary and tax deducted from your salary is that just income tax you put in or do you include national insurance too?
Basically I've got £1047 of undeclared profits, so surely my 20% figure of 209 is correct? It keeps coming back with either zero or that I owe more than the total profit?
just income tax
When I type in just the income tax on 32k, which is £4100, then the yearly rental income of £6600, it comes back that I owe £1706? That's £700 more than my total profit?
the rental income to be entered is the profit not the gross rent.
If you can make an appointment with HMRC and lay out your problem
I found them helpful indeed years ago but a lot of local offices have closed down
as for an accountants fee its tax deductible so If you used one it may pay for itself
I had a friend in similar situation and they charged him 60% penalty on his tax bill so if you owe a £1000 they could charge you £1600
that's why I would pay for advice it could wipe out your tax liability
Learn Change and Adapt ?????
Anyone have any experience of Rita 4 rent?
RITA for Rent are the official tax partner of Property Tribes and the Residential Landlords Association and have many happy customers.I have tried to contact them to answer this post for you, but my contact there is away from the office so I not sure if they will be able to input.You could try dropping a line to clients (at) rita4rent.co.uk
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
I've copied and pasted my original post to their contact section on their website, thank you anyway.
Tax advisors/ accountants fees might be tax deductible - but if your liability is £400 and the cost to have one is £300. It is a real cost you pay out, no matter how deductible it is.
am I missing something here?
Two questions smellmet.
Does the online form ask for proof of rental receipts and expenses?
liability stopped at 6 years back? Is this true
wisdom involves an integration of knowledge, experience, and deep understanding that incorporates tolerance for the uncertainties of life as well as its ups and downs.