Tax Man Warns of New Fines for Missing Filing Deadlines

At the risk of sounding stupid, which I recognise I must be to have ended up in this situation.  In 2007 we (my husband and I) purchased two properties which we rented out. The followng year we purchased a further property, but in my name only.  During these years we pumped money into the properties as the mortgage was greater than the rents, Two years ago with the change in interest rates, the mortgages reversed and they are now showing some profit.  My problem here is that I failed to declare the rent to HMRC.  Now don't prejudge me here, it was not for any other reason other than for the fact I was heavily subsidising these properties, so I just assumed the losses would eventually roll forward and be offset against the properties when they moved into a positive cash flow.  Now tax was not one of my strong points and it was not something I really followed.... except for these last few months when I everywhere I looked it seemed to be telling me to file a return. Plus the properties are now turning a profit. Last week I had an appointment with an accountant I took my records along which are all uptodate and go back to 2007 when we purchased the properties.
The records are in great detail and clearly show the losses I incurred in the earlier years.  You can imagine the grief the accountant gave me, which is understandable, but he feels I should only file the tax return for this year and leave/miss the losses from the earlier years as a result of my foolishness for not filing. He feels this will be the easiest way around this problem.  What I am concerned about is......is this good advice?  Have I got a good accountant and best advice. I know this is not an easy subject nor the task I am asking (given him). He says I could be fined heavily and said much much more.  I realise this and therefore it may not be worth bringing up the earlier years but my losses in those years are very very heavy and good now be offset against the earnings of the properties.  Can I ask for some advice from other people or accountants that may read this.Any advice could be of help, other than bending my ear for being stupid, the account has done nothing but that and at the moment we cannot move on from it.

The advice you have been offered concerns me deeply. A very good friend of mine is Steve Sims, one of the "Dummies Guide" authors. His best seller is "Understanding and paying less property tax for dummies". I'm away on holiday this week but if you call my office tomorrow and speak to Neil he will be able to put you in touch with Steve to get some advice. The office number is 01603 489118

Thank you Mark, I shall definately contact Neil tomorrow and I shall report how I get on.  Thanks again.

For tax questions I find http://www.accountingweb.co.uk/ very useful.

For tax questions I find http://www.accountingweb.co.uk/ very useful.

Personally I think you should “come clean” as it is the right thing to do. It is never good advice to tell someone to break the law.

I am no tax expert, but I think HMRC fines normally depends on how much tax should have paid. HMRC also discount the fines a lot of you come clean before they find out themselves.

Stephen Fay (http://propertytribes.ning.com/forum/topic/listForContributor?user=2q47ah1zwvr6h) is an accountant that posts on http://propertytribes.ning.com, I have not used his services, but if I was looking for an accountant myself he would be on the short list.

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