Rental income from previous years

Rental income from previous years

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Just acquired a client who has had rental income since 2007 and now wants to 'come clean'.

How accommodating are HMRC when it comes to this sort of admission - are all the overdue penalties automatic or is there scope for discussion?

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By ShirleyM
01st Aug 2011 15:17

What result?

Have you 'done the sums'?

Was there a taxable profit? If there were losses previously, I would just add them to the current assessment. If there were taxable profits it's better to to get it sorted and take the 'hit'.

My personal experience is that HMRC haven't been heavy handed with this scenario, but then those I have dealt with have been minor players in the 'rental' stakes.

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By jaybee661
01st Aug 2011 15:24

Thanks Shirley

It looks like 2007-08 & 2008-09 show a loss, whereas 2009-10 & 2010-11 show a profit - I guess it's best to come clean, we're only talking a few hundred pounds profit so can't imagine they'll be too upset!

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By cathygrimmer
01st Aug 2011 15:27

Light-handed!

Hi Jaybee

I deal with this sort of thing regularly and I find HMRC are pretty lenient generally. Often they will take tax and interest and not seek penalties (but don't give me a hard time if they do in this case!). Provide rental income and expenditure schedules as soon as you can, plus a grovelling apology (preferably with a reasonably plausible reason why your client thought he didn't need to tell HMRC) and a cheque to cover tax and interest.

As Shirley says, it isn't unusual to find there were losses not profits anyway!

Cathy

[email protected]

 

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