Incorrect tax allowance

I just got a letter from tax office detailing my tax allowances. I just noticed that I am getting rent relief for the past 4 years even though I have been living in my own mortgaged house for all that time. I was paying rent for years before that.

I will have to tell the tax office - will they penalise me for the 4 years allowances ? Or should I only say that I stopped paying rent very recently ? Will they query it any further ?

I am also getting mortgage interest relief so I would have assumed that they knew I wasn't paying rent anymore.

will they penalise me for the 4 years allowances ?

In my experience (when they collected income tax outstanding on the exercise of share options) they may claw back any excess relief granted by simply adjusting (reducing) your tax credits slightly over a few tax years. Alternatively they may request a once off settlement. If they do this and you can't afford to repay in one go ask them if they can do it by way of tax credits adjustments. Wasn't rent relief something like €500 p.a. at standard rate in which case the annual relief would be c. €100 which may not break the bank if they claw it back?

Or should I only say that I stopped paying rent very recently ? Will they query it any further ?

No - you should not engage in tax evasion in my opinion.

I am also getting mortgage interest relief so I would have assumed that they knew I wasn't paying rent anymore.

Could simply be a mistake. It happens with lots of organisations.

thanks

Thanks Clubman. I will come clean. Its not a lot of money and I dont want to do down for 6 months !

Re: thanks

I've just found myself in the very same situation and have come clean. I owe 3.5 years but not sure how much or how I will have to pay it back.

Still, as you say - better to come clean than to have to slop out in Arbour Hill for 6 months!!

Re: thanks

Have a look back and make sure you got the correct relief on your mortgage over the four years.