Punishment for not filing your rental income tax return

Punishment for not filing your rental income tax return

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The HM revenue and customs authority require that all UK taxpayers file their tax return on time and following the authority’s rules and regulations. Failure to submit your self-assessment returns can result in a significant problem if you as the taxpayer is not careful.

The HMRC has its own rules and regulations which it expects all taxpayers to adhere to. In the same light, they also have laws and mechanisms that can help them quickly identify and catch non-filers and late filers whom they can also punish as per the law.

Here is a brief overview of how the HMRC identifies non-filed returns and the various punishments given to the taxpayers culpable for them.

Can I be caught when I don’t file my tax returns? And how?

Every government institutions have a systemic and precise record keeping mechanism that allows them access and retrieve records with ease. Therefore, the HMRC as a government entity has its records of taxpayers and taxpayer activities where they can easily refer to and find out if you have or haven’t filed your rental income tax returns; if you have submitted your returns well and good. If not;

This is what will happen if you fail to file your rental income tax return;

Well, while the HM revenue and customs authority won’t jail you for failing to file returns for your rental income, they sure have some severe penalties.

For late filers, the penalties are somewhat light. For example, the HMRC has put in place a £100 penalty for late returns of up to 3 months this includes even the rental income tax return. If it’s later than three months, then taxpayers might pay an even larger amount of the penalty.

Also, when you fail to file your tax return for a consecutive number of years and you are eligible for a rebate this year, then the HMRC can withhold your landlord’s tax rebate until you file your imminent self-assessment retail income tax return.

The body argues that these penalties are meant to encourage taxpayers to submit their self-assessments on time and to subsequently use their refunds to cover for any tax liabilities that may arise for failure to file their returns.

Nonetheless, the HMRC can withdraw its penalties if you have a reasonable excuse for not filing your returns. What are these reasons?

  • If someone close to you (family or relative) died during the period of filing tax returns
  • You were admitted to a hospital for an extended period that prevented you from submitting your self-assessment tax returns
  • you suffered a severe medical condition at the time of filing the returns
  • your computer or software broke down when filing the returns ( you must be able to prove this)
  • Delays that could not have been predicted or avoided. These could be postal delays or delays caused by a disability.

These are some the situations that can make the HMRC not fine you for failing to file your rental tax income.

In conclusion, landlords in the UK are the people with the least taxable income. It is therefore unwise not to file your rental income tax returns without a reasonable excuse. So, as a landlord who is need of their refund, ensure that you file al your returns on time and following all the guidelines given by the HMRC.