Historic rental income disclosure

to disclose via amnesty or file late SATR?

Didn't find your answer?

I’ve a new client (basic rate, PAYE’d job) who has undeclared rental income (nothing major, only c£2k for the last 3 months of 16/17). They’ve never been asked to submit a tax return.

From people’s experience, presumably the best way forward is to disclose under the landlords amnesty?

 Secondary query (presuming answer #1 is “yes”) - I’ve tried online but can’t access the DDS form via the HMRC link, it keeps telling me that it “can’t identify you”. What am I doing wrong?

 Thanks 

Replies (15)

Please login or register to join the discussion.

avatar
By Matrix
17th Jul 2018 07:47

Assuming the rental income is less than £2,500 then just call up HMRC and get any additional tax collected through the client's tax code.

Thanks (0)
Replying to Matrix:
ALISK
By atleastisoundknowledgable...
17th Jul 2018 07:55

Ah, apologies for not proving all the facts; landlord is applying to extend visa & apparently Home Office get in a tisy if an applicant has an amended tax code. They seem to think it means you have a government debt of unpaid tax ...

Thanks (0)
Replying to atleastisoundknowledgable...:
avatar
By Matrix
17th Jul 2018 08:02

I would (unusually) get them put in self assessment then. I think the Let Property Campaign is for older years. Discuss with the agent helpline, they usually have no problem putting someone in, say you think the rental income was more than £2,500 and they will look at their list and issue a return.

Thanks (0)
Replying to Matrix:
ALISK
By atleastisoundknowledgable...
17th Jul 2018 08:07

Do you know what the likely penalties are? Obvs it’s a late return with tax due, but then they haven’t received a notice to file yet. I based my guess on them being in the £10/day arena (which is now I realise probably wrong), hence me thinking about the amnesty.

Sorry, I’ve not had this situation before.

Thanks (0)
Replying to atleastisoundknowledgable...:
avatar
By Matrix
17th Jul 2018 08:14

No there would just be interest on any tax paid late provided the return is filed within 3 months.

Thanks (0)
Replying to Matrix:
ALISK
By atleastisoundknowledgable...
17th Jul 2018 08:21

Fantastic, thank you v much.

(Just checking)

So I just tell HMRC there’s >£2.5k tax due from 16/17, HMRC issue a UTR & Notice to File, we file & pay SATR within 3 months, HMRC calculate interest, job done.

Thanks (0)
Replying to atleastisoundknowledgable...:
avatar
By Matrix
17th Jul 2018 08:42

This is my view and experience. I am not aware of penalties in this situation even though the notification was late but others may have different views and experience.

Thanks (0)
Replying to Matrix:
ALISK
By atleastisoundknowledgable...
17th Jul 2018 08:50

Thanks - your time is much appreciated. :)

Thanks (0)
Replying to atleastisoundknowledgable...:
By Paul D Utherone
17th Jul 2018 13:56

atleastisoundknowledgable... wrote:

Do you know what the likely penalties are? Obvs it’s a late return with tax due, but then they haven’t received a notice to file yet. I based my guess on them being in the £10/day arena (which is now I realise probably wrong), hence me thinking about the amnesty.

Sorry, I’ve not had this situation before.

No late filing penalty, but potentially a late notification penalty that is tax based and mitigable.

https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch70000

Assuming this will be an unprompted disclosure any penalty should fall in the 0-30% band, probably 0-10% in reality where the amount is small.

https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch73000

Thanks (1)
Replying to atleastisoundknowledgable...:
avatar
By Justin Bryant
17th Jul 2018 09:21

If I were you I would tread very carefully indeed here re the visa thing. You should at least do an extensive Google search on how amending a tax return can impact on one's immigration status etc. I have seen horror stories of how the Home Office treats such tax error people like extreme criminals and this causing all kinds of UK immigration problems for them.

Thanks (0)
By ireallyshouldknowthisbut
17th Jul 2018 11:12

TBQH given the Visa issues I would just declare the lot on the 17/18 return. Tax office wont care or notice, if you had an enquiry opened into 16/17 (as if) then you could simply say tax paid in 17/18 and they should close it down for this sort of a sum.

That way there can be no "red flag" to the Mrs May's 'hostile environment' to anyone without 2 generations of UK births behind them.

Thanks (3)
Replying to ireallyshouldknowthisbut:
ALISK
By atleastisoundknowledgable...
17th Jul 2018 09:49

If I'm being honest with myself, that was my first thought & probably the way that it will go.

I'll ring them and subtly advise, then send then an email with the usual warnings & qualifiers.

Part of me was trying to weigh up the extra 1 yrs fee income (£150) v fitting in the work now.

Thanks

(NB - Matrix - still appreciate your time & knowledge)

Thanks (1)
Replying to atleastisoundknowledgable...:
By ireallyshouldknowthisbut
17th Jul 2018 11:14

Its "cowboy" but pragmatic.

Thanks (0)
Morph
By kevinringer
18th Jul 2018 13:45

You can go back 4 years with SA but might risk a penalty. I had a case recently where I did 16-17 and 17-18 via SA and did the 15-16 and previous years through the landlord's campaign. I put together a case for 10% penalty for the campaign years. Due to technical problems within HMRC I had to re-submit 15-16 through SA. To date there have been no SA penalties.

Thanks (0)
Morph
By kevinringer
18th Jul 2018 13:47

Re the second query, I had the same problem. It's because you're attempting to use the individual's log-in. Scroll down the same page to find the agents' log-in.

Thanks (0)