Hi.When you complete a self-assessment tax return, you are supposed to include all your taxable income regardless of whether tax has been deducted at source or not. Failure to do so will make any calculation of your tax position inaccurate. If you received a repayment of tax as a result of the incorrect tax return, you will have to pay it back.What I suggest you do is to write to the tax office and, as you say, hold up your hands to the error, explaining why you left your pay and tax details off the return. Take a look at the notes on inaccurate tax returns here. By admitting to the error as a result of prompting by HMRC, you should limit any penalty they may seek to levy to between 15% and 30% of any tax you may have to pay as a result of the amendments to your tax liability for 2010/11.I would hope that you won't have to pay a penalty at all given the nature of the error but if one is sought, you may be offered suspension terms whereby HMRC will write to you again in a couple of years to ask you what measures you have put in place to avoid making the same mistake again. If they aren't satisfied with your response, you may have to pay the penalty at that time.I hope this helps but let me know if you have any further questions.
Hi, thank you for the reply.
I have read a little about deliberate evasion etc, I just want to ensure that I don't fall foul of this. Is there anything else you recommend to avoid this?
Would calling them be sensible?
Ok great, thank you.
I will check this on previous returns too, or should I just ensure correct from 2011 onwards?
Should I apologise for my mistake and also let them know that I will be checking other years?
Thanks for your help.
I believe I've made two mistakes on my tax returns:
1. Omitting my employment figures, although tax was paid via PAYE
2. Including repayment figures as opposed to interest only figures for loan costs, for a rental property
I'm just wondering how best to address these mistakes in light of the above letter, e.g. going back 4 years? Would it be advisable to send a letter regarding them prior to addressing the 'check your self assessment tax return - year ended 5th April 2011’ letter?
These mistakes have been corrected on my return 12-13 (prior to this letter), and will be henceforth.
I wonder if it's advisable just to ensure its correct going forwards rather then trying to amend previous returns etc?
I look forward to hearing from you.
Thank you for the reply, per year approx. £1800 compared to £6300. Will I go to jail?
How many years should I go back?
approx 12 years.
Thank you very much Tony,
So if I were to go back the six years this would be to 2008 - 2009?
With option 2, would I be saying something along the lines of?
'Thank you for your letter ‘check your self assessment tax return - year ended 5th April 2011', relating to my employment and tax collected via PAYE. Apologies I omitted this figure on my tax return by mistake, which has alerted me to check other years which I also believe to be incorrect. I would be happy to assemble this information, although I may need to obtain P60's etc. Please could you advise.
I believe there may also be a mistake on my self assessments regarding interest and loan repayments, please advise on how I may also re submit these figures to you'.
Would you suggest including the necessary figures or awaiting a response first, as it may take me a little time to obtain P60's etc. I guess also considering correspondence times etc, this may take a number of weeks and into the next tax year, which may help me a little.
If you have anyone you recommend in the east London / Essex area I'd be happy to receive a recommendation.
Ok no problem, thank you. I'm very grateful for the responses today. I'm not quite sure if I'm using this site correctly in terms of rating either individual responses or a dialogue. Please do let me know if I need to do it any differently.
It is likely to take me a bit of time to assemble those figures too, I'll come back to you as soon as possible, but approx. 10k per year income and up to about 8k costs. I guess the costs would be halved. This is for the last six years or so.
Thanks again for the replies.
Sorry I don't quite understand, if I go back to when I first received rental income it’s longer than them going back six years i.e. before 2010/11.
Are you able to suggest how I might go about this, e.g. writing to them saying I think they are right regarding the employment figures and that I'd like to review previous returns for errors / anomalies. But how would I do this, then fill them in by paper.
If I re-do everything for the last 10 years or so I may have some difficulty obtaining p60's etc. I'm going to need to ask for more time if this is the case particularly as my partner has been quite unwell. Are you able to suggest where I may get replacement p60's from?
I'll check for other errors too, pension contribs and savings interest.
I did move to a former rental property for about six months and nominate this as my PPR and sold it in 2007; I guess I'll need to declare this when I sell my current home and any CGT on it. But that is likely to be this year or next. Would I need to declare the sale proceeds in the tax year 2007? It was approx 60K
Are you able to suggest organisations where I might source a tax advisor, member organisations etc?
This is likely to be (I hope) a once in a lifetime experience never to be repeated, but I plan on getting through it somehow.