B
Buzzcut
Guest
Hi All,
I'm glad places like this exist as I'm in need of some advice if I may?
Here's my problem... I live in a 2 bed flat which is in mine and my ex-girlfriend's name. She moved out a couple of years ago, my friend was needing a place to live so we got him in to help with the mortgage.
He's just moved out and was here for 2 years, pretty much Apr 07-Mar '09. I mentioned how the rent was going to be missed to another friend and he says "I hope you declared it in your yearly tax return..".
That's when my mouth dropped open in horror. I naively had no idea that rent was classed as income and had never heard of the Rent a Room scheme.
I obviously want to put this right and pay my taxes, I don't fancy going to prison or having a criminal record!
Now come the figures..he paid me £6,500 a year in rent minus £4,250 allowance = £2,250 taxable income per year. From what I've read this allowance is split between the joint property owners so I'm liable for tax on £1,125 for 07-08 and 08-09 as is my ex?
My question is what is my next move? Do I call, write a letter or fill out a form online, I really have no idea about how to pay these back-dated taxes. Should I just deal with my part of the income and get my ex to contact them as well or just report both parts?
I guess we'll both get fined a % of the value of the tax we need to pay (for me 40% of 1125+1125 ~ £1,000)..any idea of the %?
As I say, I can't believe I've been so naive in this so any help as to the next move would be great. I could just risk it and leave it but I don't fancy getting a bill in 10 years time, I'm sure everyone gets caught eventually!
Thanks...Buzz
I'm glad places like this exist as I'm in need of some advice if I may?
Here's my problem... I live in a 2 bed flat which is in mine and my ex-girlfriend's name. She moved out a couple of years ago, my friend was needing a place to live so we got him in to help with the mortgage.
He's just moved out and was here for 2 years, pretty much Apr 07-Mar '09. I mentioned how the rent was going to be missed to another friend and he says "I hope you declared it in your yearly tax return..".
That's when my mouth dropped open in horror. I naively had no idea that rent was classed as income and had never heard of the Rent a Room scheme.
I obviously want to put this right and pay my taxes, I don't fancy going to prison or having a criminal record!
Now come the figures..he paid me £6,500 a year in rent minus £4,250 allowance = £2,250 taxable income per year. From what I've read this allowance is split between the joint property owners so I'm liable for tax on £1,125 for 07-08 and 08-09 as is my ex?
My question is what is my next move? Do I call, write a letter or fill out a form online, I really have no idea about how to pay these back-dated taxes. Should I just deal with my part of the income and get my ex to contact them as well or just report both parts?
I guess we'll both get fined a % of the value of the tax we need to pay (for me 40% of 1125+1125 ~ £1,000)..any idea of the %?
As I say, I can't believe I've been so naive in this so any help as to the next move would be great. I could just risk it and leave it but I don't fancy getting a bill in 10 years time, I'm sure everyone gets caught eventually!
Thanks...Buzz