In trouble with revenue, undeclared rental income

Discussion in 'Tax' started by poppie, Jun 3, 2013.

    Jun 3, 2013
  1. poppie

    poppie New Member

    So I'm one of those people that has my head in the sand when it comes to anything tax related. Your worse case scenario really! Every revenue letter that comes in post fills me with absolute dread! Yearly I see my accountant he tells me the amount, I write the cheque after that I'm absolutely clueless! On Friday I received the worst kind of revenue letter and I'm in so deep I don't even know where to start to get out.

    I wish I could make a long story short but I if I leave any details out I'll just be back on again...

    Basically I bought my apartment start 2007. I lived in my apartment for almost three years until the Nov 2009 when I moved out and in with my partner now husband. During the three years I lived in my apartment I always rented out a room. In Oct /Nov 2009 I rented the apartment out to a couple. I didn't bohter to change my addresses, just paid for a mail divert...and off I went!

    I'm self employed as a sole trader. I have an "account" I put that in inverted commas as I now have serious doubts about him! My accountant was always aware of the situation both the room rental and then renting out the apartment. And every year the apartment came up for discussion he just said "sure we leave it another year...if anything comes up we'll just stick in a return"

    The past few months a lot has come up! In Sept last year I went from self - employed to PAYE. My husband received a bill back dated to 2009 for single parents allowance and I received a bill from TRS back dated to the date of our marriage April 2011, for morgage interest relieve. I paid my bill and my husbands is currently taken out of his tax credits.

    At the time this happend I did ring my accountant and his advice write in an appeal( ie. just a letter) l saying that I was just living with my husband from time to time and they might review 2009 and 2010 single parent allowance. So we wrote a letter and after waiting 4mths we got a letter back from revenue asking for a range documents of prove I wasn't living with my husband 2009-2010. We could provide some of the documents but not all of them so we decided to just leave things and payup. As the truth was I was living with him since Nov 2009.

    And then Friday's letter arrived! Revenue ask for details of Rental Income years 2009- 2013 and to include tenant details, Claims for morgage intrest relief used as a deduction only allowable with PRTB registration.WHAT IS PRTB?? Never heard of it!

    And to confrim my place of residence form 17/11/2009? Not sure why this date?

    All to be returned within 14 days.

    So I just want this sorted! Im 36 weeks pregnant and this the last thing I need!

    So first question, do I ring revenue and engage (knowing my ignorance about tax affairs I'll land myself in it even deeper!!) or do I find a tax advisor and do all communication through them?

    If it is the latter can you please, please, please recommend a tax advisor (dublin/meath) that deals with revenue on a regular basis and knows all about getting people out of trouble!

    In regards with Tentants Details, do they need the names of the room rentals aswell ( both were friends of mine?) I don't think my accountant did anything about the room rentals either.

    Regarding my current tenants, its the same lady, her mother and her son since 2009 but the man has changed.There is no up to date rental agreement, when the couple split I just never bothered to make her sign agreement with her details on it.

    Futhermore in regards to prove of my address some of my addresses on bills still with my apartment and some with my huband.

    And my BIGGEST worry is that even though I want to pay up and get it sorted, will my husband now get into trouble for writing that stupid appeal letter saying I was only living with him from time to time. As you can imagine I want to kill my current account for his "poor" advice!!

    So I need any help or advice you have and if anyone has ever been through something similar any encourgement that it can be sorted will be much appreciated. Thanking you in advance!!
  2. Jun 3, 2013
  3. Bronte

    Bronte Frequent Poster

    Register today with the PRTB is your first step, do it online now. This is quite a tricky area and is untested as far as I know. That is whether you registering now, 4 years late means you're ok for the last 4 tax years at least. You abolutely need a realy good accountant.

    As far as I understand the rules you will be able to go back 4 years on the PRTB website but no further.
  4. Jun 3, 2013
  5. oldnick

    oldnick Frequent Poster

    One of the weirdest posts I've ever read...

    This is going to look rude but really meant as advice.

    You dont' seem able to deal with this and in addition to tyhe sensible advice of Bronte to immediately get a good accountant why, in your situation, are YOU dealing with this and not your husband?

    Just tell your husband to deal with this with the accountant.

    A couple of points which I'm sure your new accountant will tell you:-

    1) Any owner of property can, if still residing in that property, let room/s and is not liable to tax if the rent is under 10k p.a. nor is obliged to register with PRTB (which I'm sure by now you've read all about). Your tax liability started from end 2009, not before.

    2) It would appear that Revenue know or are confused ,perhaps from what you/your husband told them, that from November 2009 you had let the apartment. That is why they are asking for confirmation/details.

    Revenue want money ,not to get you "in trouble" . You'll just pay the tax that the rest of us have paid, the only "trouble" being a penalty and interest payments (and a few hundred to the accountant!)
  6. Jun 3, 2013
  7. putsch

    putsch Frequent Poster

    This advice would have sounded a bit weird in the 20th century let alone the 21st century - not to mention on the anniversary of the death of Emily Wilding Davison!

    From reading the posts I am assuming that the let property that is giving rise to the revenue concerns in owned by the poster who in turn is then liable for any unpaid taxes. What you seem to really need is a good accountant - unfortunately I can't give you advice on this as after 10 years I'm looking for the same myself!!
  8. Jun 3, 2013
  9. Luternau

    Luternau Frequent Poster

    I would say the comment referred more to the OP not needing the stress of sorting this out whilst 36wks pregnant-as opposed to it being mans work!

    I am not sure if you can backdate registrations with the PTRB to allow the interest (assuming there is interest) to qualify as a deductable expense. Hopefully you can-as it will reduce the tax bill considerably.

    You are going to have to give the Revenue all the information they require. They probably know more about you than you think at this stage and want to confirm the information. They will then either issue a tax assessment for the years in question or audit you (as you have made returns already).

    The income from renting a room is exempt from tax (so long as you were living there yourself) but is supposed to be declared on Form 11.

    Please be assured that this is all easily rectified. Your accountant has given you very bad advice if he was as casual about this extra income as you say! Maybe it's time to change!

    Best of luck!
  10. Jun 4, 2013
  11. Bronte

    Bronte Frequent Poster

    My own accountant told me when this PRTB thing all started that while you can backdate your PRTB registration, as in the PRTB will allow this, but revenue might have an issue with it. For the life of me I cannot remember why now. Are you 100% sure this is correct. It was something to do with what you declared on your tax return I think, that if when you filed it and you weren't registered than you couldn't later backdate this - sorry this is a bit vague, I'll try and see if I have something in writing about it. It was all new at the time etc.

    Poppie should change her accountant, he already apparently told her to lie and she's been caught out in this and also seems to have a very cavalier attitude to tax returns. In addition he never seemingly advised her to get PRTB registered, my own accountant always asked me to supply him with the PRTB regisistration numbers and for the last couple of years I have to send him the actual registrations. (I wonder is that not normal practice for all accountants? )
  12. Jun 4, 2013
  13. Bronte

    Bronte Frequent Poster

    I managed to find something on this issue about revenue/PRTB. The thinking might have changed on the advise my accountant gave me in the past. He based it on an ebrief from 2007 and whatever else accountants had access to.

    This issue was that it was not clear, at that time, from the PRTB registrations when the tenancy was registered. And you could register late. So it might not be clear that the tenancy was registered on time. For revenue purposes. And that therefore it's possible mortgage interest relief was not properly claimed.

    Does that make sense Tommy?

    Where's Mandelbrot when you need him. :) We could have a very interesting debate on this topic.
  14. Jun 4, 2013
  15. mandelbrot

    mandelbrot Former user

    I'm heee-ere! :)

    Wow, tempers are short this morning, I'll put it down to the hot weather :D

    As Tommy said, you can of course register a tenancy late and thereby qualify for interest relief - it is set out in Revenue's Tax & Duty Manual 04-08-10 ( as follows (para. 4):

    "Late Registration:
    While new tenancies should be registered within 1 month of their commencement, provision is also made in the Act for late registration at double the normal registration fee. An acknowledgement from the PRTB confirming registration in the case of a late registration will be accepted by Revenue as evidence that a chargeable person has complied with part 7 of the Act. However, a chargeable person claiming an interest deduction in his or her return must be in a position to indicate compliance with the Part 7 requirements at the time of making the return.

    Interest relief that has been denied for a particular chargeable period because a tenancy was not registered by the return filing date for that period can subsequently be restored if the landlord avails of the late registration facility, subject to the usual 4 year time limit on claims for repayment of tax."

    The issue for the OP here is that she has knowingly filed an incorrect return, and depending on the view taken by the Revenue officials dealing with her case this may result in a charge to interest & penalties arising.
  16. Jun 4, 2013
  17. T McGibney

    T McGibney Frequent Poster

    That is a pointless exercise. It is impossible for your accountant to verify from registration copies or numbers whether or not you have complied with the Residential Tenancies Act by registering all tenancies. Hence logging reference numbers etc is superfluous on his part.
    As a professional, he should have read the legislation, which is quite clear. Relying on eBriefs etc is all well and grand, but eBriefs are not law.
  18. Jun 4, 2013
  19. poppie

    poppie New Member

    Thanks thanks and thanks again!!!
    You have no idea how very grateful I am for all your advice! I’m on registering with PRTB as we speak. I just got all the tenants PPS no’s.
    I was up last night until 1.30 am searching the internet for accountants and recommendations for accountants experienced in dealing with Revenue on a regular basis. Unfortunately I it’s like looking for a needle in a haystack! I finally resorted to ringing a friend also a sole trader and a landlord. Her accountant gave her all the appropriate advice and his firm seem a bit bigger than my “one man band”....rubbish band at best! I’m still nervous as my previous accountant was also recommended by a friend. So again any recommendations would be soooo helpful. I trawled the recommendation posts on this website and there is a lot of people asking but very few actual recommendations. I vowed if I get this sorted I will definitely post who got me through it!
    Thanking you all again and please keep it coming any ideas suggestions or experience with something similar would be greatly appreciated.