If a taxpayer receives any taxable income in a tax year of which HM Revenue & Customs is unaware, then they have a legal duty to ďnotify of chargeabilityĒ to tax by 5 October following the end of the tax year in which the income was received.
The HMRC recently published guidance explaining that a lot of straightforward work can be dealt with over the phone to avoid the administrative burden of completing a tax return.
They explained that clients with net property income (that is income after expenses incurred) of £2,500 can use this facility, as they will make an adjustment through your PAYE code to recover the tax due. For more complicated matters they insist on receiving notification in writing.
You mentioned that you made a loss on the property in previous years. Even though you have not been asked to fill out a tax return, you should still notify HMRC of any losses, as you can offset these losses now that you have made a profit from the rental business.
By Jo Nockels
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