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Let property campaign penalties

Let property campaign - failure to notify penalties

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Hello all, 

I joined the LPC yesterday. I moved to the UK 5 years ago, i own a small flat in Cyprus. Income is around 3,000 per year. All taxes have been declared and paid in Cyprus. This is my only property. 

I understand that I should have paid taxes for this in the UK and I am happy to do so. I am a PAYE employee so I have never done self assessment in the UK. 

I asked local accountants for help, everyone is charging 600+ but is quite a simple case as I am not going to claim expenses, and the income / taxes paid have already been declared in Cyprus. What is the fee that i should expect ? 

Also my tax in the UK is 600 a year less the tax already paid in Cyprus, will be 300 per year. Will i have to pay the pentalty of 1,600 for every year that I did not do my self assessment here or only for the first year that I did not register ? Seems too harsh to end up paying for 300 of tax a penalty of 2,000+?

Any feedback is welcome . Thank you. 

Replies (12)

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By Wanderer
03rd May 2019 08:44

Marimar wrote:

Hello all, 

I joined the LPC yesterday. I moved to the UK 5 years ago, i own a small flat in Cyprus. Income is around 3,000 per year. All taxes have been declared and paid in Cyprus. This is my only property. 

I understand that I should have paid taxes for this in the UK and I am happy to do so. I am a PAYE employee so I have never done self assessment in the UK. 

I asked local accountants for help, everyone is charging 600+ but is quite a simple case as I am not going to claim expenses, and the income / taxes paid have already been declared in Cyprus. What is the fee that i should expect ? 

Also my tax in the UK is 600 a year less the tax already paid in Cyprus, will be 300 per year. Will i have to pay the pentalty of 1,600 for every year that I did not do my self assessment here or only for the first year that I did not register ? Seems too harsh to end up paying for 300 of tax a penalty of 2,000+?

Any feedback is welcome . Thank you. 


So local accountants have suggested around £600 to sort out five year's back tax?
You have decided yourself that this is 'quite a simple case' but then you don't know the answers to your subsequent questions. In the question you have already displayed that you don't understand the system.
You say feedback is welcome, my feedback is to suggest you pay one of the accountants you have already contacted what they are asking to sort this out for you.
You state that you 'joined the LPC yesterday'. Did you do this yourself rather than via one of the accountants?
If you did it yourself I personally would probably not take you on as a client.
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By Rammstein1
03rd May 2019 08:53

If you don't want to pay £600 for someone experienced to sort it, do it yourself.

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By Duggimon
03rd May 2019 08:56

£600 annually for a simple-ish tax return is a lot, but £600 for fixing the whole mess initially, and then half that or less annually, ongoing, would be about right, in my opinion.

It's definitely better value for money than free advice on the internet, which is less than worthless, given the extreme limitations of what anyone here can do for you.

If you're worried about penalties of £10,000, it would seem that £600 to mitigate those as far as possible would be money well spent.

Thanks (2)
RLI
By lionofludesch
03rd May 2019 09:33

"Joined the LPC".

Sounds like a private members club.

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By lesley.barnes
03rd May 2019 09:37

I think £600 for sorting out 5 years of tax returns, dealing with the overseas tax and appealing against penalties is pretty cheap. It isn't as simple and straight forward as you think once you start dealing with HMRC who won't have your best interests at heart.

Thanks (1)
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By Matrix
03rd May 2019 09:47

It won’t be simple though as Cyprus will have a different tax year and the accountant will need to calculate the profits for the UK tax year in GBP, together with the double tax relief.

I don’t know why you wouldn’t claim expenses, then you would save enough to pay the accountant’s very reasonable fee.

There would only be penalties for the late self-assessment if you were sent tax returns to complete, the penalty to include on the LPC form will depend on the reason for the oversight and, if I recall correctly, is a % of the total tax now falling due. However I don’t have all the facts in front of me but think it may be less than you think and so just engage someone now.

Thanks (1)
Replying to Matrix:
RLI
By lionofludesch
03rd May 2019 09:52

Matrix wrote:

It won’t be simple though as Cyprus will have a different tax year ......

What ???

You mean other countries don't use 5th April ?

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Replying to Matrix:
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By Marimar
03rd May 2019 10:11

Thank you for your response. The rent is paid to my parents and not my account, they deal with the flat and they are quite old so I dont think they will be able to remember what was spent where and dont keep invoices. I have never even used that income money, i am just the onwer of the flat. So i cant provide this information re expenses.
I have never compelted self assessment here as i never notified hmrc and i was also never sent a return to complete.

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Replying to Marimar:
By Duggimon
03rd May 2019 10:16

You might not have any tax due, you really should engage one of those accountants and that £600 might be everything you need to pay.

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Replying to Marimar:
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By Matrix
03rd May 2019 10:22

This is the pertinent fact that you should have given the accountants and hopefully they would have figured out that you can claim the remittance basis as expertly raised by Gainsborough below.

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Scooby
By gainsborough
03rd May 2019 09:57

Marimar, are you bringing the Cyprus income into the UK? If not, you should discuss with an accountant whether the remittance basis is an option for you if you are UK resident but not UK domiciled - which might possibly be the case if you only moved to the UK 5 years ago.

If you are bringing the income to the UK or are UK domiciled then I agree with the above comments - £600 to sort out 5 years is cheap.

Thanks (1)
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By Justin Bryant
03rd May 2019 10:53

RB will not help (under LPC or otherwise) for tax years where he is out of time to claim RB (this expires 4 years from the end of the tax year in question) and HMRC are not obliged to accept voluntary late tax returns (with a RB claim) outside the normal time limits. A similar point applies re late DT relief claims outside the usual time limit (4 years I think from memory).

As for the £600 fee, that sounds like a low fee to me. I've just been charged £600 by my garage to fix a small fault on my cheap car.

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