Letting Agent's liabilities

[mehstg]

Iam an overseas landlord and have been letting my flat in London for the past 6 years via a letting agent. They were paying me the rental income gross and now the IR has audited this letting agent and has requested the tax due for the last 2 financial years plus interest and penalty payments. I have now almost paid back the figure due by not receiving any rent for the last 6 months but as the letting agent was/is responsible for my rental property and did not deduct any tax at source is it me or the letting agent who should pay the interest and penalty payments?

[davidjohnbutton]

Under the Taxes Management Act (1970 I think off the top of my head) the agent should have deducted tax at the basic rate on ALL the rental received and accounted to the tax office it - the landlord can then reclaim any relief allowed directly as an overseas resident.

This only applies to a landlord who lives overseas (i.e. out of the UK)

So, yes the agent should be bearing the penalties and interest ultimately though it is the landlord who is liable initially.

[mehstg]

Thanks for your reply and I hear what you say but the problem I have now is that the letting agent is charging me all the interest and penalty payments on top claiming the fact they let me pay in instalments (ie not paying me my rental income for 6 months). Can they do this as like you say it was down to the letting agent in the first place to deduct tax at source?

[davidjohnbutton]

Refer the agents to the legislation I identify above and tell them that it is their fault that these charges have arisen and that you will not be paying these charges. If they withhold money despite this, you will have to either change agents or sue them.

[justaboutsane]

For our overseas LL we have an NRL number, he deals with all the Tax issues at his end. I get a form once a year which I tick as no tax deducted and he deals with it all in his own way!

Contact the relevant department.. I think its IR and then will tell you about NRL they are very helpful