Mr & Mrs G owned and let two flats, but did not declare their profits from rents for five years until the letter from HM Revenue & Customs dropped on their doormat. They came to us for help. We worked out their tax liabilities over the five years, submitted lettings accounts to HMRC, and agreed the amounts to pay including negotiating over the penalty for not declaring the income.
We could assure Mr & Mrs G they were not going to jail, and the only worry they had was in writing the cheque for HMRC. They were very relieved to have someone to represent them.
Mr D bought and let a flat after he retired through ill health. It never occurred to him that he was liable to tax on his letting profit and on the subsequent sale of the flat. He then received the letter from HMRC.
- We prepared accounts for the lettings over the six years of ownership
- Computed the capital gain on the sale of the property,
- Found a capital loss Mr D had overlooked which we could set off against the gain, and
- Calculated the tax due plus interest, and negotiated to keep the penalty to a minimum.
Mr D was delighted to have had all the worry taken away.
Mr & Mrs E inherited a property which they let. They knew they should declare the profit from the letting to HMRC but due to family sickness they did not get around to the tax office in the required time. They were then afraid to do so for fear of getting into trouble, and so they did nothing for six years. Eventually their consciences drove them to seek advice. We declared the letting profits to HMRC and agreed the tax and penalty, which was not great as the clients had eventually come forward voluntarily.
Once again we saved our clients a great deal of worry.
Mrs T had been working self-employed in the “black economy” for six years. Her conscience also drove her to consult us. We found that although she owed National Insurance, her profits were too low to attract more than a small amount of tax, and even that HMRC decided was not worth collecting.
Mrs T is now working within the system and after some business advice concerning what she could charge her clients she is earning a lot more and is happy to be a significant taxpayer making a real contribution. Of course we still claim for her proper expenses so that she doesn’t pay more than she has to.
Capital gains problems
Mr A had with his family tried some amateur tax planning which involved having his father gift his house to him. This actually caused more tax problems than it avoided, and our client realised that he could face a significant charge to capital gains tax amongst other issues.
Without us he would have probably paid quite a lot of tax, even if he had gone to another adviser. We were able to find, through our knowledge of case law used in conjunction with the legislation, a way of persuading HMRC that the gain was exempt from tax.
Mr & Mrs L had inherited a property from Mrs L’s mother, let it and then subsequently sold it. They got into deep water trying to deal with the tax position and not understanding how to calculate their income and gains.
We acted quickly to make sure the position was right, and also received a referral to act for other family members.
An accountant client acting for a husband and wife who were divorcing asked for advice concerning the sale by the wife to the husband of her share of the business they jointly owned. It was not possible for financial reasons for this to happen immediately so we devised a three year plan to accomplish the transfer of the business with a minimum tax cost to either spouse.