Tax Implications and Penalties
12:18 PM, 12th June 2014, 12 years ago
9
What view would HMRC take if a landlord overestimated his property rental return by say, £6,000 due to error/illness/stress?
Can the landlord request mitigation (illness) against his mistake?
Thanks
AA Properties (Wales)
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Member Since January 2011 - Comments: 12193 - Articles: 1395
12:21 PM, 12th June 2014, About 12 years ago
You would need to take professional advice on the circumstances but one thing I know for sure is that any penalties will be a lot more lenient if you own up to making a mistake than they would be if you were to stick your head in the sand, hope they go away and then get discovered.
I recommend you to speak to this chap >> https://www.property118.com/member/?id=452
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Member Since June 2013 - Comments: 19
3:19 PM, 12th June 2014, About 12 years ago
If he had overestimated his property return, whouldn’t that be an over-payment, rather than an underpayment, or have I missed something?
Overpayments are never a real problem, although HMRC will not refund without due process. ‘Fessing up to your mistakes with HMRC is always cheaper than HMRC finding them.
Member Since April 2014 - Comments: 39
4:07 PM, 12th June 2014, About 12 years ago
As I understand it an over estimation under the previous penalty regime would attract no penalty as the fine is a percentage of the tax underpaid. Not too sure about the recent (since 2012 ?) Regime though as it has changed to the revenues advantage.
Member Since July 2013 - Comments: 34
11:15 AM, 14th June 2014, About 12 years ago
Over estimate will mean you paid more tax than required and therefore restating the figures will result in a refund so HMRC will not charge a penalty as you over estimated and I assume filed your tax return ontime.
Jason
Member Since January 2011 - Comments: 12193 - Articles: 1395
11:21 AM, 14th June 2014, About 12 years ago
Reply to the comment left by “Jason Holden” at “14/06/2014 – 11:15“:
Doesn’t that depend on what was over estimated? i.e. was it income or expenses?
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Member Since July 2013 - Comments: 282 - Articles: 2
11:45 AM, 14th June 2014, About 12 years ago
AA,
Are you suggesting that you are now claiming a refund of the overestimation and the tax thereon.?
Member Since July 2013 - Comments: 34
11:49 AM, 14th June 2014, About 12 years ago
Reply to the comment left by “Mark Alexander” at “14/06/2014 – 11:21“:
Hi Mark as the wording was overestimated his property rental return it alluded to rental rather than expenditure, but as you rightly state it could be either.
Jason
Member Since July 2013 - Comments: 184 - Articles: 1
9:38 PM, 14th June 2014, About 12 years ago
Hi guys. I want to be honest here , and this may be a wake up call to all landlords with one property or a portfolio. Hmrc did a compliance check for my taxes from two years ago. I was very sick at the time and had two serious operations, and unable to think straight I sent my accountant incorrect figures where last week I sent them new figures. I calculated that I overestimated my rental income by 6,000 plus. I already had a loss for the year as I geared up and converted flats, keeping my eye off the rental ball. I really don’t know what view hmrc will take.
Member Since January 2011 - Comments: 12193 - Articles: 1395
9:54 AM, 15th June 2014, About 12 years ago
Reply to the comment left by “AA Properties Wales ” at “14/06/2014 – 21:38“:
If you are saying that you declared £6,000 more income that you earned, in error, then you should get a refund.
However, you may also expect a significantly increased chance of an investigation under the circumstances.
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