Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hi.You should have registered for self-assessment when you started to let the property unless the net income was less than £2,500 per part-owner in which case any tax due could be collected through your tax code if you have a salary or a pension. Many thousands of people have fallen into the trap of thinking rental income is not taxable which is odd given that it is income like any other source. The tax office will be able to find out when you acquired the property as they have access to property databases. It will be better if you approach them before they find you.Take a look here for information on letting income and tax. There is also a section on expenses. All of the items you have mentioned you can claim for but the tax office may disallow any expenditure that you have no receipts for.What you need to do is to draw up an income and expenditure account for each tax year that the property has been let and then write a letter to the tax office and apologising for not informing the tax office when you first let the property. The tax office will assess any tax that is due, they will charge interest from when the tax should have been paid and may charge a penalty. You can read about the old and new penalty regimes here and here.You may be required to register for self-assessment but I would wait until HMRC tell you to. If you run into problems in your dealings with the tax office, you might consider appointing an accountant or tax adviser to handle the matter for you.I hope this helps but let me know if you have any further questions.