Looking for advice on landlord becoming tax compliant

J

Johnny5

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In a scenario where a landlord has a number of years of non declared rent what approach is considered best to become tax compliant? With an Unprompted voluntary qualified disclosure it is my understanding Revenue have the statue of limitations of looking back 4 years but does this allow tax to only be payable for the previous 4 years?
 
Johnny5 said:
In a scenario where a landlord has a number of years of non declared rent what approach is considered best to become tax compliant?
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In most cases, it's very simple. File the outstanding returns. Pay the tax bills. Move on.


PS you should really edit the thread title, as the current title is misleading.
 
You may need a good qualified tax advisor regarding your arrears due. But a good accountant may find ways to legally reduce your debt. There may be more to your story and my over-riding advice to you is to tread carefully and swiftly. Standing still probably will cost you with penalties etc. Put a price on future Peace-of-Mind and you'll know what I'm talking about.
 
Brendan Burgess said:
Hi Tommy

I presume he is completely wrong on the 4 year limit?

My understanding is that there is a 4 year limit on refunds, but not on tax evasion.

Brendan
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Yes, completely and utterly wrong, Brendan. Your understanding is correct, not only regarding evasion but also neglect, which appears to be the issue here.
 
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Leper said:
You may need a good qualified tax advisor regarding your arrears due. But a good accountant may find ways to legally reduce your debt. There may be more to your story and my over-riding advice to you is to tread carefully and swiftly. Standing still probably will cost you with penalties etc. Put a price on future Peace-of-Mind and you'll know what I'm talking about.
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Well said.
 
You will be charged interest and penalties, interest is circ 8% per year of tax amount due, penalties is a % of total tax due, but is smaller where you make sure voluntary disclosure, and also dependent on amout of tax due each year as far as I know.
 
cloughy said:
You will be charged interest and penalties, interest is circ 8% per year of tax amount due, penalties is a % of total tax due, but is smaller where you make sure voluntary disclosure, and also dependent on amout of tax due each year as far as I know.
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Not necessarily, and in my experience not if they play their cards right. They will normally be liable to a 10% late filing surcharge on top of the cumulative tax bill.
 
If its your first qualifying disclosure, the unprompted disclosure the penalty charged on top of the taxes and interest would be 5% if you could convince them it was careless behaviour or 10% if deliberate, provided full co-operation.

If it relates to foreign assets then much more significant penalties,
 
The statutory interest is not always a given, but when making your declaration do you not have to apply it or do revenue calculate whether they will apply that to the penalty %

Depending on the total tax due or taxable income not disclosed, engaging a professional to put your case forward and ensure you include all allowable expenses may pay for this cost and give piece of mind, for future returns you will have to make.
 
cloughy said:
The statutory interest is not always a given, but when making your declaration do you not have to apply it or do revenue calculate whether they will apply that to the penalty %

Depending on the total tax due or taxable income not disclosed, engaging a professional to put your case forward and ensure you include all allowable expenses may pay for this cost and give piece of mind, for future returns you will have to make.
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If you wish your disclosure to be qualifying, the tax and interest must be calculated by you. Otherwise it's not a qualifying disclosure and you've lost the protections offered by the disclosure. Revenue don't have to accept the disclosure if they feel it's not a true disclosure.

Section 1077F TCA 1997 defines a qualifying disclosure as a disclosure of complete
information in relation to, and full particulars of, all matters occasioning a liability to tax that
is made in writing, is signed by or on behalf of the taxpayer and is accompanied by:
• A declaration, to the best of that person’s knowledge, information and belief that all
matters contained in the disclosure are correct and complete; and
• A payment of the tax and interest on late payment of that tax.
Furthermore, the category of default determines the scope of liabilities which must be included in the disclosure in order for it to be considered qualifying.
Deliberate Behaviour: All liabilities to tax, duty and interest, in respect of all taxes and periods, where previously undisclosed.

Careless Behaviour: All liabilities to tax, duty and interest in respect of the relevant tax and periods that are the subject of the disclosure.

Finally, a disclosure is not a ‘qualifying disclosure’ if:
 The disclosure is ‘incomplete’; or
 The disclosure is not made in writing.
 
relax carry on said:
If you wish your disclosure to be qualifying, the tax and interest must be calculated by you. Otherwise it's not a qualifying disclosure and you've lost the protections offered by the disclosure. Revenue don't have to accept the disclosure if they feel it's not a true disclosure.

Section 1077F TCA 1997 defines a qualifying disclosure as a disclosure of complete
information in relation to, and full particulars of, all matters occasioning a liability to tax that
is made in writing, is signed by or on behalf of the taxpayer and is accompanied by:
• A declaration, to the best of that person’s knowledge, information and belief that all
matters contained in the disclosure are correct and complete; and
• A payment of the tax and interest on late payment of that tax.
Furthermore, the category of default determines the scope of liabilities which must be included in the disclosure in order for it to be considered qualifying.
Deliberate Behaviour: All liabilities to tax, duty and interest, in respect of all taxes and periods, where previously undisclosed.

Careless Behaviour: All liabilities to tax, duty and interest in respect of the relevant tax and periods that are the subject of the disclosure.

Finally, a disclosure is not a ‘qualifying disclosure’ if:
 The disclosure is ‘incomplete’; or
 The disclosure is not made in writing.
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Operation overkill.

T McGibney said:
In most cases, it's very simple. File the outstanding returns. Pay the tax bills. Move on.
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relax carry on said:
Nope. That's operation those are the rules. What you are describing seems to be operation file & pay and hope no one notices. Do you think the framework is just for whenever you feel like it?
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Hardly. I've successfully completed and fully resolved many dozens of these late filing cases over the years, some stretching to decades late, with no voluntary disclosures and no interest and penalty charges imposed on any of them.

Late filing ≠ tax default.
 
T McGibney said:
Hardly. I've successfully completed and fully resolved many dozens of these late filing cases over the years, some stretching to decades late, with no voluntary disclosures and no interest and penalty charges imposed on any of them.

Late filing ≠ tax default.
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Why was there no interest or penalties applied? What might happen in a case of inability to pay any liability in full?
Thanks
 
T McGibney said:
That, surely, is a matter for Revenue. But why would there be?


In that case, the taxpayer is obviously in default.
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I don't understand your second answer sorry. What are the options if any available to a landlord who may have a tax liability that they cannot pay in full at once?
 
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