Massive Tax Problem

[DarceyK123]

My husband rented out his flat 10 years ago, the Agent at the time told them they would sort everything and pass the remains rent on to him monthly.

He's now going to sell it and has now discovered no tax has ever been paid!

He was very naive, he realises that now but it's too late.

He a very proper and law abiding man who has worked hard, never even had a parking ticket.

He's now worrying himself sick ( and so am I) he thinks he will be found out and go to prison, we will loose our home etc etc.

He's a broken man who can't think of anything else, any advice really appreciated

[fiction-factory]

So are you saying he thought they were deducting the tax from him? Did he get statements from them as they should have made it clear what the rental income was, what their fees were and any other deductions? Is he saying they deducted the tax but didn't pass it on to HMRC?

[DarceyK123]

Being new to renting he didn't think about the tax, assumed it was all in deductions but has nothing to say this.

He's not blaming the Agent, he knows it's his fault.

[goodgoalie]

Good advice here:
https://www.gov.uk/renting-out-a-property/paying-tax

[Hopkirk]

There may have been no tax due.

[DarceyK123]

That's what I said Hopkirk but he's too terrified to find out.

[DarceyK123]

He's terrified that it's such a long time they will throw the book at him.

[Baldric]

///He's not blaming the Agent///

Why not, sounds like they are responsible for the problem?

[bednobs]

well no matter what the outcome, it wont get any better or go away by ignoring it

[Peter Pedant]

common
your arent in the middle of nowhere
go to an accountant and ask him to make a voluntary declaration
There will be tax due - ( I cant believe there is no tax due on a rental property over ten years ) - but he needs proper accounts - because some things will be chargeable,
but there will also be various penalties a fixed fine for not doing a tax form.

this is really really common - my nephew had to do this after he forgot do a tax form for 6 years. He admitted I had told him -

[DarceyK123]

I know bednobs, we just don't know which way to go.

Does anyone know the penalties? He won't go to prison will he?

[Peter Pedant]

// Why not, sounds like they are responsible for the problem?//

well no agent I know pays tax on behalf of a landlord - the agent has to have knowledge of the landlords tax affairs to get it right

[Zacs-Master]

Have you read goodgoalie’s link? It would seem to be very straightforward as to whether you should have paid tax. If you’re not doing it as a business, it seems you wouldn’t owe a penny.

[DarceyK123]

Baldric, he now realises that the Agent just meant they would take their commission, deduct for ant repairs and stuff like that.

He's been very naive, but he feels like a criminal.

[Peter Pedant]

no one goes to prison for neglecting to do a tax form even on a regular basis
the penalties are a subject of negoatiation
which is why you need prefessional help

for six years of non compliance, my nephew got away with £600 - whereas it could be £250 flat for each form and £10 amonth thereafter.

prsion is out of the question

[Zacs-Master]

Stop panicking and READ THE LINK.

[Peter Pedant]

// If you’re not doing it as a business, it seems you wouldn’t owe a penny.//

sorry this is rubbish - it is income and it needs to be declared even if tax is not to be paid ( yes if it is income but not tax due it STILL beeds to be declared

[Hopkirk]

I rented a flat out, though it was long ago in the eighties.

If my memory serves me correctly, after allowing for mortgage payments, repair and maintenance costs and wear and tear, there was no tax due.

[Peter Pedant]

read the link - and then get professional help
there is absolutely no chance that you need not do a tax form.

a few of the posters are landlords

[Peter Pedant]

// I rented a flat out, though it was long ago in the eigh//

eighties piffle - the current rules are now that in these same circs you need to make a declaration

[goodgoalie]

No question of prison, Darcey; but read the link I posted and get thee to an accountant - ask friends for a recommendation.