I found out this morning that the partner of one of my friends is receiving income from rental property and not declaring it. She is also employed.
When I asked her why she hadn't declaring it she said she "didn't need to" as she wasn't making a "profit". Her mortgage is £600pm (or there about) and rent received is £520. She therefore thinks that because her mortgage is more than the rent, that she is not making a profit. Her mortgage is a capital repayment mortgage and is NOT a buy to let product.
I tried my best to explain that the capital repayment element of her mortgage was not an allowable expense, but she was not prepared to listen. I also told her that she HAS to declare the income, and again she was not prepared to listen.
Maybe I wasn’t speaking in layman’s terms and she didn’t understand. How can I explain this in a more simple way?