Rental Income and tax

[FredBloggs]

In 2004 I purchased a house with a windfall that I got (got the windfall in 2003 and paid CGT on it). The rental income was negligible in 2004 as house only let from December on and I submitted a tax reurn for year to Dec 2004. However that was my last piece of correspondence with the tax man! I have now sold the house and am getting the paperwork together for the CGT calc. I'm a PAYE worker so up to this haven't really had to think too much about filing returns - other than to claim back medical expenses etc. But when I began thinking about tax I reckon I should have been returning the rental income on annual basis even though its only a small proportion of my income. Can anyone tell me will I be hit by surcharges for 2005 and 2006 by the revenue and if so how is it calculated. Also when would I need to return my 2007 rental income by?

 

[Nige]

There is an interest charge of roughly 12% per annum on underpaid tax. The Revenue also have a raft of penalties available to them, and you can expect to be hit with an additional 10% of the tax charge for submitting your 2005 tax return late.

Your 2006 tax return is due by 31 October 2007.

Your 2007 tax return is due by 31 October 2008.

Get your returns in immediately and pay the tax due (including the 10% surcharge on 2005). Then wait to for the bill for the interest (it's non cumulative, so paying the tax amount will stop the interest accruing).