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Voluntary Disclosure-rental income

Voluntary Disclosure-rental income

Hi All

I have completed a voluntary disclosure for one of my client's showing rental income. However, I received a call from the voluntary disclosure office saying that my calculation of tax was incorrect. The reason for this is because they do not take into account the underpayment/overpayment of PAYE taxes paid during the tax year. They simply look at the total rental profits and total PAYE gross income and apply the relevant rate of tax.

My client is a higher rate tax payer. They had overpaid tax in a few of the years (no P800T or PAYE repayments were made to the client). Therefore, the actual amount of tax due as per our calculations is lower than what they are saying the figure should be. They have informed me that any overpayment of tax should be requested from the PAYE tax office rather than making the adjustment in the disclosure. Therefore, the client would have to pay more tax than necessary and it may not be guaranteed that we will be able to recover this money from the office.

Has anyone else had this issue with the voluntary disclosure office? Does HMRC have any rules posted online for this?

Thank you in advance for your help


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By Patss
04th Mar 2016 15:00

Hi Nigel

Thank you for your response. We would be able to trigger a P800T for the in date tax years. However, would HMRC repay the tax to the client for out-of-date tax years? If not, should we not include this in the disclosure?

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I thought you might come back on that.  Same thing happened to my client.  The issue is although some tax repayable is from out-of-date tax years when did the over-payment effectively arise?  Only because of Lettings Campaign's insistence on gross payment is there a problem.  I don't think the whole matter has been properly thought out and the Lettings Campaign are separate to HMRC.  I would include all of it and cite the point that the over-payment has arisen due to Letting Campaign's intransigence/inflexibility owing to the nature of their software.  Start with HMRC and then go back to Lettings Campaign if no luck.  It is worth going to appeal if it is a lot of money.  My client overpaid £30 in 10/11 and I rang HMRC and left a message with the customer service function to get a technician to get back to me. 

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