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Where Taxpayers and Advisers Meet

Not paid tax or filed tax return in 20 years. Help!

jaydee
Posts: 4
Joined: Wed Aug 06, 2008 3:22 pm

Not paid tax or filed tax return in 20 years. Help!

Postby jaydee » Thu May 02, 2019 11:45 am

Hi. Looking for advice on how to start filling tax returns. Last had job and paid tax in 1998. Went overseas. Returned to England 2005. Not worked since. But bought rental property in 2006. Rent profit was less than tax allowance so didn't think I needed to fill in tax return. Since 2017 I think rental profit may have exceeded personal allowance... Not sure as not good at record keeping... Currently my income consists of maintenance from ex for self and kids plus child tax credits plus rental property profit. Searching hmrc site I am now terrified of the fines I may have to pay even if I've not exceeded personal allowance and owe no tax. Will I really be fined for not filing a tax return each year since 2005???? I don't even know if I have a tax number. Any advice welcomed.

Jholm
Posts: 55
Joined: Mon Mar 11, 2019 4:22 pm

Re: Not paid tax or filed tax return in 20 years. Help!

Postby Jholm » Thu May 02, 2019 2:22 pm

Seek professional help, possibly in relation to the Let Property Campaign. Penalties are charged generally as a % of the tax liability so if you catch HMRC on a good day, they may well accept nothing to pay.

Common misconception is that it does not need reporting if the profit is below the tax allowance. In fact, if the profit is over £2,500 or gross rents over £10,000, then it is grounds for a tax return.

Another common error is that only the mortgage interest is deductible before arriving at profits, not the entire capital repayment. There are further restrictions on mortgage interest deductions, increasing over the coming years. Therefore, the profit you refer to may not always be correct for tax purposes.

wamstax
Posts: 1861
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: Not paid tax or filed tax return in 20 years. Help!

Postby wamstax » Thu May 02, 2019 3:00 pm

As Jholm says you need to seek professionals advice as things aren’t always as bad as you fear. Best get the latest lease/ agreements and also the last 6 years bank account statements; mortgage statements and as much paperwork as you can gather for income and expenses for the letting and get a suitably qualified tax adviser to have a look over the papers etc and give you a rough idea of the potential damages.
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact can be obtained from website

bd6759
Posts: 3069
Joined: Sat Feb 01, 2014 3:26 pm

Re: Not paid tax or filed tax return in 20 years. Help!

Postby bd6759 » Thu May 02, 2019 6:12 pm

Common misconception is that it does not need reporting if the profit is below the tax allowance. In fact, if the profit is over £2,500 or gross rents over £10,000, then it is grounds for a tax return.
No. You are misconceived. No-one needs to complete a tax return unless required to do so by notice given to them by HMRC. If a person is not asked to complete a tax return, there can be no penalties for not doing so. A notice must be given for there to be a failure to comply with the notice.

The only requirement where notice has not been given is to tell HMRC if there is a libaility to pay tax. The income must exceed the personal allowance (or gains must exceed the annual exemption).

The OP says that she does not know if her profit exceeds the personal allowance. I find that unlikely. She will know from the regular deposits into her bank account how much she receives. If it exceeds the personal allowance, she should follow the advice given and speak with an advisor. One wonders if she told TC Office that she has rental income?

jaydee
Posts: 4
Joined: Wed Aug 06, 2008 3:22 pm

Re: Not paid tax or filed tax return in 20 years. Help!

Postby jaydee » Thu May 02, 2019 8:35 pm

Thank you for your replies. Can I ask what is the let property campaign? Is it some kind of amnesty for undeclared rental income? And yes I need professional help but where do I search for someone expert in cases like mine who can help negotiate any fines .I feel this is not something for the local village tax accountant.

Jholm
Posts: 55
Joined: Mon Mar 11, 2019 4:22 pm

Re: Not paid tax or filed tax return in 20 years. Help!

Postby Jholm » Fri May 03, 2019 9:46 am

@bd6759

Per HMRC:

You must report it on a Self Assessment tax return if it’s:
•£2,500 to £9,999 after allowable expenses
•£10,000 or more before allowable expenses

Jholm
Posts: 55
Joined: Mon Mar 11, 2019 4:22 pm

Re: Not paid tax or filed tax return in 20 years. Help!

Postby Jholm » Fri May 03, 2019 10:37 am

Jaydee, any accountant should be at least familiar with the Let Property Campaign. It is more commonly used than you might think. Approach a few stating your are interested in engaging them to deal with the LPC and see how they respond.

pawncob
Posts: 4277
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: Not paid tax or filed tax return in 20 years. Help!

Postby pawncob » Fri May 03, 2019 12:18 pm

@Jholm Using those figures, HMRC say no tax return is required.
https://www.gov.uk/check-if-you-need-tax-return
With a pinch of salt take what I say, but don't exceed your RDA

Jholm
Posts: 55
Joined: Mon Mar 11, 2019 4:22 pm

Re: Not paid tax or filed tax return in 20 years. Help!

Postby Jholm » Fri May 03, 2019 1:38 pm

@pawncob

Typical!

Jholm
Posts: 55
Joined: Mon Mar 11, 2019 4:22 pm

Re: Not paid tax or filed tax return in 20 years. Help!

Postby Jholm » Fri May 03, 2019 1:40 pm

Wait.... I just tried it out (excuse the crude copy/paste job):


Did you work for yourself between 6 April 2018 and 5 April 2019?

No


What was your total income for the year?

Less than £50,000


Did any of your income come from UK property or land?

Yes


How much did you get from UK property or land?

£2,500 or more (or £10,000 or more before expenses)






You need to send a Self Assessment tax return

Based on your answers, you need to send a return for 2018 to 2019.


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