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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5112
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have just discovered that I have misunderstood the rules

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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!
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 here 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. and other Tax Specialists are ready to help you
Customer: replied 2 years ago.
Many thanks. I'll look into this asap.