A: If you are receiving income from renting out a residential property then you should have told HMRC and you may have Income Tax to pay. In fact you are obliged to submit a tax return if your gross rents (i.e. the income from the property before deducting any expenses) are over £10,000 per annum, or the profit (income after deducting expenses) is more than £2,500. Even if your circumstances are under these thresholds, you should always contact HMRC to confirm whether they wish you to complete a return- for example in some instances, they may agree to collect any tax at stake via your tax code and remove the need for a tax return.
If you should have paid tax on the income then you may now have penalties and interest to pay.
As you have been renting out the property for a number of years I would encourage you to make use of HMRC’s Let Property Campaign. This allows taxpayers the opportunity to come forward and disclose rental income- in exchange for the best possible terms from HMRC.
Your local TaxAssist Accountant would be happy to get your affairs up to date and liaise with HMRC on your behalf if you think the Campaign is right for you. Please contact us to be put in touch with your local office.
By Jo Nockels
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