Just wondered if anyone had any experience of doing a disclosure through the Let Property Campaign
Not a client of mine but more of a friend of a friend who I got chatting to the other day, they own a 2nd property (50/50) which they have rented out for the past 3 years through a management company, however they have been declaring all of the profit in only one of their names because they only work part time while the other is a basic rate tax payer, they did seem genuinely shocked when I said this was not allowed and that the profits had to be split in the same ratio as that of ownership because they had been told previously that it was okay to do this by a financial advisor.
I have since had a quick look at their books and everything seems to be in order except for the profit split which amounts to additional tax being owed by the basic rate tax payer of circa £500 for the 3 years, I informed them that HMRC do have a Let Property Campaign where landlords can complete an unprompted disclosure for any undeclared income, I did explain that I had no previous experience of doing one before for any of my clients but would be happy to help out where I could.
On looking into the procedures further it seems that as well as working out the undeclared tax and the interest you also have to set your own level of penalty of either 0%, 10% or 20% depending on the circumstances.
On the basis of what I have said above I was going to advise on including a 10% penalty but just wanted other views on this and any advice from anyone who had completed a disclosure themselves and how it all went
Cheers
-- Edited by Artois on Saturday 31st of March 2018 09:26:29 PM
__________________
Doug
These are only my opinions of how I see things and therefore should not be taken as advice
I had a similar scenario a few years ago when a new client came to me a little shocked that a solicitor (she was looking to sell the property) advised that she should have been declaring the rental! Anyway, I helped with a disclosure for 3 years worth of back-dated figures at a 10% penalty - there was hardly any profit. HMRC were happy with this, but she got a £100 penalty for late filing of each TR.
I had a similar scenario a few years ago when a new client came to me a little shocked that a solicitor (she was looking to sell the property) advised that she should have been declaring the rental! Anyway, I helped with a disclosure for 3 years worth of back-dated figures at a 10% penalty - there was hardly any profit. HMRC were happy with this, but she got a £100 penalty for late filing of each TR.
IMO I would say 10% is where to pitch it.
Hope that helps.
Hi Mike, thanks for the reply I will advise them to go for 10%
Cant see any late filing penalties coming into play as the guy doing the disclosure has never received any notices to file a return so should only be liable for late notification penalties which are geared on the amount of tax that is owed so hopefully this will be countered by the 10% penalty, will get the disclosure sent off and see how HMRC respond.
Once again thanks for your help.
__________________
Doug
These are only my opinions of how I see things and therefore should not be taken as advice
