Thanks for your response Jholm, your post seems quite encouraging.
My friend was aiming for an "Unprompted, Deliberate but not concealed" penalty (From HMRC website: this is is where you knew that you should have told us about a circumstance that affected your liability to tax within the relevant time limit, but you chose not to tell us).
It gives a penalty "range" of 20-70% of tax owed with a "failure to notify" of more than 3 years standing subject to a minimum of 30%. Given that she has lots of supporting documentation and wants the whole thing done with as quickly as possible, I would think a 30% penalty should be achievable. Do you really think she should go lower? perhaps to 20%?
No apologies necessary for stating what may be obvious but, since you mention it, I have a couple of questions re the Wear & Tear allowance:
Firstly, I've been led to believe that even though the 10% is calculated on "net" rent, If the landlord hasn't paid any of the council tax, utility or cable fees, the "net" rent,for W&T calculation purposes, is actually the rent paid by the tenant to the letting agent. Is this so?
Secondly, during the year she had to make the eviction, my friend lost 6 months rent when the tenant lived there but just didn't pay the rent. Given that that tenant caused more wear & tear than any other, it seems ironic that my friend should be limited to W&T calculated on ony 6 months' rental payments. Could it be argued that a full year's rent was actually due and that that should be the figure used to calculate that year's W&T allowance?