How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask taxadvisor.uk Your Own Question
taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4985
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
54961312
Type Your Tax Question Here...
taxadvisor.uk is online now

I have just discovered that I have misunderstood the rules

Resolved Question:

I have just discovered that I have misunderstood the rules for declaring tax on my rented out property. I rented my flat out in late 2006 because I moved away, paying rent to live somewhere else ( my place of work). I wrongly assumed I didn't need to declare the rental or the mortgage and costs on my rental property because it was costing me much more to rent the replacement property.
It's now clear that I should have been paying income tax on the rental income. I'm a higher rate tax payer.
The rental income has been about 690 PCMwith agents costs of about 60, mortgage interest of 286 and other costs (maintenance and land rent/service) of around 100 PCm.
How should I approach this to minimise the damage? Should I lodge, say 10000 with HMRC to demonstrate good faith? HoS do I raise this with HMRC!
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question...The profit from property income is in the region ofRental income 690ExpensesAgents charges 60Mortgage interest 286Others 100Profit 244Wear & tear allowance 69Net profit 175Annualised profit £2,100Income tax at 40% £840 You should communicate with HMRC and notify your wish to take part in the Let property campaign and take it further.More information on making disclosure is covered herehttps://www.gov.uk/government/publications/let-property-campaign-your-guide-to-making-a-disclosure/let-property-campaign-your-guide-to-making-a-disclosure Based on above calculation you can work out likely tax charge pre any penalties etc and deposit it with HMRC to show good intent. I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
taxadvisor.uk and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Many thanks. I'll look into this asap.
JHP