Let Property Campaign Calculations
Hi everyone, a family member has received a letter to declare unpaid tax on rental income since 2022. They work part time and the rent always just covered the mortgage and they were under the naive assumption that because there was no cash profit they wouldn’t have tax to pay.
I would just like to check I am working it out correctly. They have worked part time in each of the years and with the added rental income on top of their wages they are still within the 20% tax bracket.
There is very little in the way of expenses other than a deep clean, redecorating and garden repairs after some difficult tenants.
I have calculated 20% of the rental income, added 20% of that figure as a penalty and then added the interest using the Gov.uk calculator.
Have I missed anything?
Do they now just pay that amount and hope HMRC accept it?