Income on Leased Property

[cello]

Just trying to work out where the income from my property needs to be placed re tax/ni.

I am not currently working (although looking) and so my rental income is paying for all my living expenses. I do occasional work on the property when my tenant raises a issue rather then calling in a tradesman.

I get no help from the state, receive no pension or anything else but I believe as I in receipt of a limited income I cannot claim any benefits or even tax credits/low wage supplement.

Again with this countrys state policys it looks I would be better off if I sold my rental property and bought several toys (boat / fast car) and lived off the state instead. TMK they only look at liquid assets and not what you have in your garage/marina.

Maybe working the benefits system in this country ~(like my local MP) is the way forward!!

[Gordon999]

whats the question ?

[jmh]

I don't know if anyone can help me on this one: Last year I filled in my tax return online (income tax for letting out my flat). I called the HMRC three times every times I stumbled on a section to ask for their help, they told me which figures to enter in certain parts of the form, I done what they said and at the end of the form was advised I was OWED £3000! I thought that this didn't look right, so I contacted them by the online form AND faxed them. They never replied to me. The claim was "randomly" picked out for a complience check, so I thought they would pick up any errors and rectify them since they never replied to my fax or correspondence. Five months later they credited the £3k to my bank account! I spent it on an awesome holiday and now they are demanding evidence that I am entitled to this £3k and are investigating it! I have the names of all of the people I spoke to asking for help, copies of the faxes and online forms I filled in, all of which were ignored.
My question is: a) can they make me pay this amount back and b) could there be any sort of additional fine?

[Telometer]

Based on the information you supply, I have no idea.

You need an accountant. Badly. Get one.

Yes, if you owe the money they can make you pay it back; and yes there could very well be additional fines.

[rmmc]

My question is: a) can they make me pay this amount back and b) could there be any sort of additional fine?

a) Yes, they can ask back the amount. The advice given over the phone is not binding.

b) As per new penalty regime, the fine could be upto 100% of tax loss, in this case if it turn out to be a false claim they can issue penalty of up to 100% tax loss. It depends how HMRC treat this error as now penalty is based on behaviour.

As per previous post, get an accountant, get the records together, prepare the account, make full disclosure if it is an error. This way HMRC may mitigate the penalty.

Hope this Helps

[jmh]

That's unbelievable, So if they paid me £3000 in error they could make me pay back £6000??!!!
I know I shouldn't have been so naieve but before they paid me they spent two months doing "security checks" before they paid it, so I presumed once I got the money it was all okay. Then once the money had been spent they start investigating again!
I did keep a log spanning these two months - they even cancelled the payment three times before they actually issued it.
I guess I will get in touch with an accoutant and see what they say!
Thanks for the info.

[Telometer]

If they paid you £3,000 in error, it is most likely that this was because the error was yours - you asked them for the money back. This is the glory of self assessment.

[rmmc]

That's unbelievable, So if they paid me £3000 in error they could make me pay back £6000??!!!


As commented that you file the tax return and it is self assessment. You have to take reasonable care to prepare your accounts, keeping the records. If the error was genuine such as careless mistake than penalty may not be that sever.

However, no one knows how HMRC will apply this new penalty and its criteria.

There is some guidance and introduction on their website. I am unable to post the link. If you pm me I would send you the link.