Help- Rent receivable issue!

Hope someone can help as I am at the end of my tether on this one!

I have a rental property with a tennant who has arrears dating back over the last few years ( app. 20K).
I have filed my F11 every year however after a recent audit I have discovered that I must pay tax on rent receivable. If I have not received the rent and do not have money to pay tax on monies I have never received where do I go from here??

The tennant is still renting the property, I cannot afford to go down the legal route of trying to expel them and I have sent over 20 letters informing the tennant of their arrears to date etc..

The revenue are looking for the the tax on this rent that was not declared or received- where does this leave me??

I understand that you should declare your rent receivable, pay preliminary tax on rent receivable but surely there is a policy whereby you are refunded the tax paid on rent that was never received at the end of the year?

Why don't you take a case against the tenant to the PRTB?. I presume that you have the tenancy registered with them.

wendy_darlin said:

I have filed my F11 every year however after a recent audit I have discovered that I must pay tax on rent receivable.

The revenue are looking for the the tax on this rent that was not declared or received- where does this leave me??

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At the moment, you are regarded as having extended credit to your tenant. The rent receivable is an asset which is (in theory) convertible to cash by collecting the debt. So, just like when a credit sale is made, you have a taxable income event when the rent became receiveable.

That said, you can and should make a specific bad debt provision for that rent which is clearly irrecoverable - which will have the effect of a corresponding reduction in your taxable income. I think. Get an accountant maybe?