Tax Implications and Penalties

by AA Properties Wales

4 years ago

Tax Implications and Penalties

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Tax Implications and Penalties

What view would HMRC take if a landlord overestimated his property rental return by say, £6,000 due to error/illness/stress? Tax Implications and Penalties

Can the landlord request mitigation (illness) against his mistake?

Thanks

AA Properties (Wales)



Comments

Mark Alexander

4 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 >> http://www.property118.com/member/?id=452
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Jeremy Edwards

4 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.

Alex Williams

4 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.

Jason Holden

4 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

Mark Alexander

4 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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Jeremy Smith

4 years ago

AA,
Are you suggesting that you are now claiming a refund of the overestimation and the tax thereon.?

Jason Holden

4 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

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.

Mark Alexander

4 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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