Form 12 Questions

S

SarahO

Registered User
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10
Hi, On behalf of friend of mine who has no access to internet, we were wondering if we might get some assistance here.

He has recieved last year a form from revenue - form 12 which need to be back by oct 31st - wondering why he received this, as he is PAYE and wonders have they picked up something on him to suggest they know more ? or is this purley random selection ?
The problem here is he has a property rented for over 8 years now, and has not submitted it for tax purposes to date, as it didnt really pay him anything as rented to students.
was planning this year to sort it out, but reckoned only put it in for 2008 and then next year etc (and submit the 09 tax return with 08 income ) - are they likely to start digging around on this, or do you think they will just accept he started renting it out from last year and leave it at that ? does anyone know how they work.
We know this is risky, but how risky ? otherwise he reckons he could end up forking out a lot of money and hopes not to have to do this.
Any idea's ??
 
SarahO said:
The problem here is he has a property rented for over 8 years now, and has not submitted it for tax purposes to date, as it didnt really pay him anything as rented to students.
Click to expand...

If you took say €200 a month for rental of a room, say 4 students in the house over 9 months of the year for 8 years is about €57000. I'd say it paid OK!!

I'd say the form is random as I got one last year for the first time and I dont untaxed income from property rental....
 


Firstly the F12 is probably random.

Secondly He should have filed in each year it was rented. regardless of whether it "was paying him" or not.

Thirdly, he is hoping for advice on how to evade tax which might be due. AAM does not give advice on tax evasion as this is illegal.
 
Hi Thanks for the replies, he understands it should have been paid and why he didnt - not too sure.
Not really looking for advice on how to avoid paying it, just wondered if anyone thought they were likely to trawl back through the other years if one submitted it now for just 1 year - but appreciate your comments on this also.
 
Also - 1 other quick question, are you allowed to earn upto any particular amount before you have to submit for tax, like rent a room relief ?
 
No, once the entire property is let then all income is subject to income tax, less expenses. If he was living in the house and renting out rooms then he would be entitled to 10000 euro rent from those rooms without any tax liability. That is not the case for your friend though. He should have been filing tax returns all this time and risks being severely punished for not doing so.
 
There is the possibility that the Form 12 was triggered by one of his tenants making a submission for tax relief on rent paid.

If there have been no returns made for eight years, no matter where your friend chooses to start, Revenue will look for the preceding years details if these have not been submitted / reconciled.

For example, if he starts with 2008, they will write back and say "ooops we don't have 2007, please return this ASAP", etc.
 

And remember that the seperate 200 euro property tax is owed by the end of this month. Non payment of this means a fine of 20 euro per month.
 
Any advice on how he should go about filing the returns for these years in order to pay it and possibly avoid penalities ? he had been living in it for some of them as he was a student also living there, so the rent a room might cover a no of them, but the rest he will have to sort out ASAP
 

He's ok for the years that he was living in house, although up to last year the amount you could earn under rent a room scheme was around 7K. He'll have to get an accountant and contact tax office to settle up with previous years of renting house in full. The tax office may look favourably on the fact that he has come to them.
 
Revenue can go back forever so even though submitting a tax return for one year might not trigger anything now but say in 5 years time an issue might come up and they will look back and the interest and penalties might be more than the value of the property. Your friend would be well advised to come clean and do up his accounts for the last 8 years and he'll sleep a lot easier.

As I've said before Revenue have enless time on their side, you don't.
 
Thanks for all your responses - I have advised he does this, get an accountant and sort it out now as may be lucky and not see so much on the penalties if so.
 
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