BTL Mortgage + Undeclared HMRC Income
Discussion
Seen a lot of this going back 7+ years when I worked in commercial banking.
Having HMRC issues was a big no no when coming to agree additional loans/mortgages, and infact within the sanction comments I would be expected to remark on the fact of where the client is/was on tax (across, vat, paye, Corp tax etc), this could be particularly painful when we had agregated facilities across various entity’s.
Having now been out on my own for the last 3 years (mainly doing commercial stuff) such a request is pretty standard (old sa 302, now self assessment calculation) from the lenders I deal with.
In regards to undeclared HMRC income I can give two examples one I’m sure some reading may be able to relate to.
Case A, a former colleague of mine bought a house with her husband, following his redeployment to the USA they became divorced, subsequently she met some one else and moved in with this person, and then rented out her house for 10yrs.... an “accidental landlord as such”..
Not only had she not submitted a return to hmrc to document the rent received, unfortunately the income she was receiving + the net rent put her into the higher tax bracket.
It resulted in a property sale and following the CGT still resulted in HMRC having a shortfall, of which she made up payments over the following two years.
Case B, a referral last year which involved a conversation in which a husband and wife couple (with over 80 properties) were looking to refinance, reason undeclared hmrc income for 8 yrs on said properties. They wished to “help” HMRC in regards to back payments + interest etc, however HMRC are preparing to take them to court and are preparing to send them to prison.
Having HMRC issues was a big no no when coming to agree additional loans/mortgages, and infact within the sanction comments I would be expected to remark on the fact of where the client is/was on tax (across, vat, paye, Corp tax etc), this could be particularly painful when we had agregated facilities across various entity’s.
Having now been out on my own for the last 3 years (mainly doing commercial stuff) such a request is pretty standard (old sa 302, now self assessment calculation) from the lenders I deal with.
In regards to undeclared HMRC income I can give two examples one I’m sure some reading may be able to relate to.
Case A, a former colleague of mine bought a house with her husband, following his redeployment to the USA they became divorced, subsequently she met some one else and moved in with this person, and then rented out her house for 10yrs.... an “accidental landlord as such”..
Not only had she not submitted a return to hmrc to document the rent received, unfortunately the income she was receiving + the net rent put her into the higher tax bracket.
It resulted in a property sale and following the CGT still resulted in HMRC having a shortfall, of which she made up payments over the following two years.
Case B, a referral last year which involved a conversation in which a husband and wife couple (with over 80 properties) were looking to refinance, reason undeclared hmrc income for 8 yrs on said properties. They wished to “help” HMRC in regards to back payments + interest etc, however HMRC are preparing to take them to court and are preparing to send them to prison.
Edited by Deesee on Saturday 7th April 23:46
Deesee said:
Seen a lot of this going back 7+ years when I worked in commercial banking.
Having HMRC issues was a big no no when coming to agree additional loans/mortgages, and infact within the sanction comments I would be expected to remark on the fact of where the client is/was on tax (across, vat, paye, Corp tax etc), this could be particularly painful when we had agregated facilities across various entity’s.
Having now been out on my own for the last 3 years (mainly doing commercial stuff) such a request is pretty standard (old sa 302, now self assessment calculation) from the lenders I deal with.
In regards to undeclared HMRC income I can give two examples one I’m sure some reading may be able to relate to.
Case A, a former colleague of mine bought a house with her husband, following his redeployment to the USA they became divorced, subsequently she met some one else and moved in with this person, and then rented out her house for 10yrs.... an “accidental landlord as such”..
Not only had she not submitted a return to hmrc to document the rent received, unfortunately the income she was receiving + the net rent put her into the higher tax bracket.
It resulted in a property sale and following the CGT still resulted in HMRC having a shortfall, of which she made up payments over the following two years.
Case B, a referral last year which involved a conversation in which a husband and wife couple (with over 80 properties) were looking to refinance, reason undeclared hmrc income for 8 yrs on said properties. They wished to “help” HMRC in regards to back payments + interest etc, however HMRC are preparing to take them to court and are preparing to send them to prison.
That latter case is pretty extreme and shows just how flawed and weak Self Assessment has been. No wonder HMRC want to see the back of it.Having HMRC issues was a big no no when coming to agree additional loans/mortgages, and infact within the sanction comments I would be expected to remark on the fact of where the client is/was on tax (across, vat, paye, Corp tax etc), this could be particularly painful when we had agregated facilities across various entity’s.
Having now been out on my own for the last 3 years (mainly doing commercial stuff) such a request is pretty standard (old sa 302, now self assessment calculation) from the lenders I deal with.
In regards to undeclared HMRC income I can give two examples one I’m sure some reading may be able to relate to.
Case A, a former colleague of mine bought a house with her husband, following his redeployment to the USA they became divorced, subsequently she met some one else and moved in with this person, and then rented out her house for 10yrs.... an “accidental landlord as such”..
Not only had she not submitted a return to hmrc to document the rent received, unfortunately the income she was receiving + the net rent put her into the higher tax bracket.
It resulted in a property sale and following the CGT still resulted in HMRC having a shortfall, of which she made up payments over the following two years.
Case B, a referral last year which involved a conversation in which a husband and wife couple (with over 80 properties) were looking to refinance, reason undeclared hmrc income for 8 yrs on said properties. They wished to “help” HMRC in regards to back payments + interest etc, however HMRC are preparing to take them to court and are preparing to send them to prison.
Edited by Deesee on Saturday 7th April 23:46
I know at least 4 people who think that because their rental income is a similar figure to their mortgage repayments they don’t have any profits to declare. Each and every one of them won’t take telling and refuse to understand why they are wrong. I know one who did get stung for a £5k tax bill and sold up as a result.
"Head in sand" is the best way to describe that attitude.
HMRC has a "Let Property Campaign" which has been running for a number of years. They have been picking up on unreturned rental income through details provided by the Land Registry, usually at the point when the property is sold or otherwise disposed of.
The Self Assessment system is not working.
HMRC has a "Let Property Campaign" which has been running for a number of years. They have been picking up on unreturned rental income through details provided by the Land Registry, usually at the point when the property is sold or otherwise disposed of.
The Self Assessment system is not working.
Eric Mc said:
If only that was written in plain English.
DAs post made complete sense to my english reading brain.As for the topic of this thread, not news to me.
Last year when applying for a new residential mortgage HSBC asked me for my tax return in order to check my BTL credentials, and why shouldn't they? Entirely understandable and can only be a positive thing.
gibbon said:
DAs post made complete sense to my english reading brain.
As for the topic of this thread, not news to me.
Last year when applying for a new residential mortgage HSBC asked me for my tax return in order to check my BTL credentials, and why shouldn't they? Entirely understandable and can only be a positive thing.
If only the tax returns told the truth.As for the topic of this thread, not news to me.
Last year when applying for a new residential mortgage HSBC asked me for my tax return in order to check my BTL credentials, and why shouldn't they? Entirely understandable and can only be a positive thing.
Eric Mc said:
gibbon said:
DAs post made complete sense to my english reading brain.
As for the topic of this thread, not news to me.
Last year when applying for a new residential mortgage HSBC asked me for my tax return in order to check my BTL credentials, and why shouldn't they? Entirely understandable and can only be a positive thing.
If only the tax returns told the truth.As for the topic of this thread, not news to me.
Last year when applying for a new residential mortgage HSBC asked me for my tax return in order to check my BTL credentials, and why shouldn't they? Entirely understandable and can only be a positive thing.
Don't know how some buy to let's have been getting mortgages - but as a accountant, I have done tonnes of Accountant certificates, all wanted SA302. The tax overview things are pointless - th eamount of tax payable is on the SA302 - although lenders are using this to check if taxpayers paid the tax on time, and if they owe any.
gazza5 said:
Don't know how some buy to let's have been getting mortgages - but as a accountant, I have done tonnes of Accountant certificates, all wanted SA302. The tax overview things are pointless - th eamount of tax payable is on the SA302 - although lenders are using this to check if taxpayers paid the tax on time, and if they owe any.
And the SA302 no longer exists - see other thread.Gassing Station | Finance | Top of Page | What's New | My Stuff