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bigduckontax
bigduckontax, Accountant
Category: Tax
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I have a couple of rental properties but was unaware that I

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Hi, I have a couple of rental properties but was unaware that I should have been declaring the rental income to the tax office. I want to address this now but would like advice on whether it would be in my best interest to contact HMRC by myself ar get an accountant/tax person to do it on my behalf?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Whichever way you go you are in deep waters and the quicker you own up to your tax office the better as HMRC may not impose penalties if you approach them. They can charge interest on unpaid taxes, but that is only fair; after all they pay interest on over paid tax. You are only taxable on net rental income. The following are the usual items you can deduct [source: Which]: 'The most common types of expenses you can deduct are:water rates, council tax, gas and electricitymaintenance and repairs to the property (but not improvements)contents insuranceinterest on a mortgage to buy the propertycosts of services, including the wages of gardeners and cleaners (as part of the rental agreement)letting agents' feeslegal fees for lets of a year or less, or for renewing a lease of less than 50 yearsaccountant’s feesrents, ground rents and service chargesdirect costs such as phone calls, stationery and advertising for new tenantsThe expense should be incurred wholly and exclusively as a result of renting out your property.' You are OK for the 15/16 tax year as the return does not have to be in for weeks yet; it is the earlier tax years which will be the problem. If you make a net loss in a year it can only be carried forward against future rental surplus profits. You now have to make your peace with your HMRC tax office. You can do it yourself or engage an accountant to act on your behalf, but the latter course will cost; might be as high as four figures if the case is complex. I do hope that my reply has been of assistance.
Customer: replied 1 year ago.
Hi Keith, thank you for your very helpful reply. Do you think HMRC is likely to be more sympathetic if I contact them myself or will this make no difference in your opinion?
Expert:  bigduckontax replied 1 year ago.
I don't think it will make a ha'porths worth of difference. The essence is to come clean as soon as possible in an attempt to minimise penalties. Please be so kind as to rate me before you leave the Just Answer site.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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