Has anyone done an LPC disclosure recently going back to years prior to 2017/18. Completing the online disclosure only gives me 2017/18 onwards. I need to go back to 2011/12. Is there a different link?
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not done one for a while but if its the same as it was 6 months ago the bit you are in will toggle the number of years depending on the reason you gave for the late declaration in the previous question....
Oh - so it does. Client has a reasonable excuse, but can only disclose three years as a result seems odd.
@redleader, quite. most back taxes clients coming to us (and we used to do one most months, but I paused them for now) are more than willing to go back to day one, but HMRC often don't want the cash which is perverse.
I have had more than one client have to muck about with them to agree to pay more than they legally had to out of a what they saw as a moral obligation to settle up. I certainly don't discourage such views amongst my clients, as alien a concept as that might be to some.
I know. It gives one a funny feeling of "they got away with it".
@redleader, quite. most back taxes clients coming to us (and we used to do one most months, but I paused them for now) are more than willing to go back to day one, but HMRC often don't want the cash which is perverse.
Ridiculous! What is a "reasonable excuse" for treating income as not reportable/taxable?! Specifically, there's been enough about "buy to let" in the media for that last 10-15 years. Not like it's some obscure corner of the tax legislation!
I've elected to go with not deliberate and no RE, and then pan it out in white space or by letter.
The RE is that the taxpayer was overseas at the time, and the mortgage repayments exceeded rents, and so he was under the mistaken impression that there was no profit to report. He was not an SA taxpayer, and so had no interaction with HMRC.
The RE is that the taxpayer was overseas at the time, and the mortgage repayments exceeded rents, and so he was under the mistaken impression that there was no profit to report. He was not an SA taxpayer, and so had no interaction with HMRC.
Still blows my mind!! One thing mitigating penalties; another to say, hey, "X years' tax that you should have paid? Have it on us (law abiding) taxpayers"!
You need a very very good RE to convince HMRC that you didn't appreciate that tax was due on your rental income. Very few errant landlords can muster such an excuse, but for those few who can t is perfectly fair that they shouldn't be faced with possibly huge back duty to pay out of the blue. If you deny s118(2) to landlords then you must also deny it to taxpayers who have failed to notify chargeability in circumstances that you would accept that back tax shouldn't be paid.
The chance of the proposed RE succeeding are slim to non existent.
HMRC are unlikely to accept it as an RE, so you will be given the opportunity then to disclose the earlier years.
As an overseas landlord who has had no contact with HMRC, the letting agent or, if no agent, the tenant should have been deducting tax and paying it over to HMRC. If you take that tax into account there may be nothing for your client to disclose and indeed may be due a refund for in date years, if he paid some of the costs or is due a PA. Of course, the agent/tenant will cop a packet but that is merely because they failed to meet their obligation as tax gatherers.
If he has been paying tax in his country of residence on the rents then he is due TCR on the UK tax, subject to that country's time limits for rebates.
"I didn't realise I had to pay tax in the UK as I was paying tax in country X" (if true) is a better excuse than the one proposed.
Well, in this case, in his country of residence he had diplomatic immunity from prosecution and exemption from tax. The tax authorities could request payment, but he was under no obligation to make it.
Since he retired and returned to the UK that immunity has lapsed.
In the circumstances, it would be fair to say that he had no exposure to tax whilst overseas, and in fact it was the furthest thing from his mind.
The exemption didn't apply in the UK.
Having said that, as I say, I have elected to go with not deliberate and no RE, so all years will be reported.
You are unlikely to get good advice from this website, setting aside all the usual caveats, if you fail to mention relevant facts. Only now you mention that your client was a Crown employee!
The tenant should have been deducting tax so I once used this as a defence for a client under LPC.
I've long suspected HMRC aren't really that interested in policing BTL income tax evasion, as with dodgy R&D credit claims. I doubt you'll ever see anyone convicted of either. I've only seen one or two BTL CGT evasion cases , and that's it I think. You might get a wrist slap penalty if you're unlucky, so crime definitely pays here and HMRC simply pay lip service in this area (and other areas of fraud as we've seen recently).
