Spectator Crossword N0. 2681 By La...
Crosswords0 min ago
No Returns Submitted for 2 years
3 Answers
My sister's boyfriend is currently filing his tax returns for 07/08 which needs to be done online by Jan 09
He started letting out the property in June 2005. To my knowledge this is the FIRST tax return he has done as he made losses / small profits in 05/06 and 06/07
From reading other posts on a similar topic, it would look like he should have posted returns for these 2 years.
My question(s) are:
1. Can you fill in historical tax returns for the 05/06 & 06/07 years? Would any fine be charged?
2. Or would it be best to just file the tax return for this year and ignore the previous years - what are the chances of them finding out?
He started letting out the property in June 2005. To my knowledge this is the FIRST tax return he has done as he made losses / small profits in 05/06 and 06/07
From reading other posts on a similar topic, it would look like he should have posted returns for these 2 years.
My question(s) are:
1. Can you fill in historical tax returns for the 05/06 & 06/07 years? Would any fine be charged?
2. Or would it be best to just file the tax return for this year and ignore the previous years - what are the chances of them finding out?
Answers
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Yes, he could file returns late for 06 and 07. Not sure you can still do it online though. And yes, if returns were required for those years and weren't done then when they find out he'll be fined.
I'm not sure exactly what the tax return form asks in respect of property income. It might ask when he began renting out in which case his choices will be to lie or tell the truth. If he tells the truth they may well come back and ask about earlier years. If he lies they probably won't but if he's ever found out then he'd have committed fraud by lying.
Presuming there genuinely wasn't any tax due for the previous years (and remember even a small profit should have seen tax assessed if he has another job) then there's no real point in lying about it. The consequences in tax terms are negligible. If there was no tax to pay then there's still no tax to pay. As said above there would be a penalty for late submission but no tax and consequently no interest either.
If he's genuinely worried about it go see an accountant. You might be surprised at the cost, it might not be much if it's pretty simple. If not then go ahead file this year as accurately as possible and wait to see what happens.
I'm not sure exactly what the tax return form asks in respect of property income. It might ask when he began renting out in which case his choices will be to lie or tell the truth. If he tells the truth they may well come back and ask about earlier years. If he lies they probably won't but if he's ever found out then he'd have committed fraud by lying.
Presuming there genuinely wasn't any tax due for the previous years (and remember even a small profit should have seen tax assessed if he has another job) then there's no real point in lying about it. The consequences in tax terms are negligible. If there was no tax to pay then there's still no tax to pay. As said above there would be a penalty for late submission but no tax and consequently no interest either.
If he's genuinely worried about it go see an accountant. You might be surprised at the cost, it might not be much if it's pretty simple. If not then go ahead file this year as accurately as possible and wait to see what happens.
You should file the historical returns. There may be a failure to notify penalty which is �100. But you can always appeal against it should it arise. The profit is negligible so it might not happen. Please do not ignore these previous years or lie on the form it is not worth it. Once HMRC catch up with you and they will eventually they will look into every detail of the income under a microscope. If you are upfront about it at least you will not have to worry anymore. I would submit the return with a covering letter explaining the situation.We are not as bad as many people think
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