he rents out a house at no profit (tenant pays what owner pays in mortgage interest) so there is no profit.
We have been filing tax returns for 3 years for him (he runs his own engineering ltd) and did not know about it.
Do we need to amend past returns if he did not make a profit on his rental?
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Profit has nothing to do with it, I suspect then he could be bringing forwarding losses to use up?
Need to amend
If there is no profit from the letting, you would not need to notify HMRC that tax was chargeable and thus, sign up for self-assessment tax returns in the first place, but as the client is already in self-assessment, the tax returns you have filed are incomplete and ought to be amended.
However, as there is no additional tax payable, I would just amend the 2011/12 and 2012/13 tax returns which are still in date.
Why are there no losses to bring forward? Surely there's maintenance, water rates, 10% wear and tear he can claim, all this would breakeven to zero every year? What am I missing here?