underdeclared tax

[RED FOX]

Hi I have a small property rented out for past 10 years at a small rent always paid into currant bank account but not declared as on tax return, I have now been requested to supply all details to tax office, whats the worse that can happen!
or in other words how much is this going to cost me!

Thanks for any help,

[robbob]

Hi Red

Did you have any allowable expenses that would reduce taxable income?

Eg was there a loan that was taken out to fund the purchase of this property or when you introduced this property into your "rental busines"?

Other expenses - repairs/council tax/utilities etc?

Was it rented out furnished? You may be able to claim wear and tear

Worst case is that you will have to pay tax on this income* with interest for 10 years and penalties for non declaration.

* This should be net income after deducting alloawble expenditure as appropriate.

It may be better to get accountant to liase with the revenue if you are not confident you will be able sort this out yourself.

[Simon Sweetman]

and if you do go to an accountant, make sure it's someone used to dealing with HMRC, not just a number cruncher.

[rab_c_nesbitt]

10 years not paying tax?

How good to know this is not as bad as being a benefit cheat..

[HMRCWageSlave]

A word of warning here - it's quite possible that any investigation will cover more than just this property so do not assume that if you have other guilty tax secrets that the tax inspector won't know some of them. You'll almost certainly be asked to supply all your bank statements and account for all major deposits into all of your accounts and you will probably be asked if there's anything else you want to tell the inspector. Think carefully about this - if you have something to9 hide, the inspector may already know. If you say nothing, and he does find something else, you'll find that the penatlies start to get expensive.

WS

[wamstax]

Hi Red,
If you have other sources of income that are under your control (e.g. self employed and/or company director) then the property angle might just be HMRC's way of shoving the wedge into you for at least 10 years (and they can go back 20 years if they can prove negligence). In this event you would be best to take advice from a tax investigation specialist BEFORE you do anything about admitting or denying anything.
If you want try the following links that might give you a few pointers or ideas
http://www.wamstaxltd.com/tax_enquiry_stages.html
http://www.wamstaxltd.com/Dont_let_them_bully_you.html
http://www.taxenquiryadvice.com/spare_page.html

regards and hope this helps
bill@wamstaxltd.com