Hi I don't pay tax on a buy to let house I have had for nearly 15 years. I regret this but am now in a bit of a corner. I cant afford to come clean and pay a penalty.

Can I sell the house or will selling bring it to the attention of the HMRC?

I realise that I have done wrong but when I bought the property I was young and ignorant.

Assuming the property in question isn't your only property then by selling you will incur Capital Gains Tax on the profit.

Unless you want to compound the problem and not declare this gain as well then declaring it via self assessment would probably alert HMRC at least to the potential of unpaid taxes.

In theory you could try and argue it was just a second home but HMRC are not stupid and can easily check the voter register and the like.

They also have in the last few years deployed a piece of software that was designed by BAE Systems which can analyse data from many sources looking for potential connections between transactions and ownership.

Give we have systems that can track and engage a Mach 3 object the size of a cricket ball, spotting something dodgy is going to be relatively easy given the right data. The amount of data HMRC have access to is growing all the time - the downside of the online world we now occupy.

However like most systems they will have had to establish thresholds to trigger further investigation given they've not got infinite resources - and are hence starting at the top of the income league and working their way through the list, Doctors, Dentists, Plumbers, Builders, Buy to Let, Ebay traders etc. It is also not the odd forgotten savings acount with a few bob in it we are talking about.

Keeping you head down might keep you under the radar for a while longer but I would guess at somepoint they will ask the question. I suspect it will be easier to get them to accept your cost figures if you initiate any action given they might well decide that if the amount seems reasonable to simply accept it and save time if it looks like there is nothing more to find.

If the amount involved is very large then hire an accountant to make your case and minimise the damage. Otherwise I entirely agree about an early, full and frank disclosure. HMRC gets really irritated at having to sift through lies and half-truths.

From the OP comments , I think that this may be a very relevant part of HMRC guidelines : https://www.gov.uk/gover...-to-making-a-disclosure The tax payer must check that they are eligible to be included in the "let property campaign" and all the relevant information seems to be contained in the links.

HMRC "normal" penalties are a little complicated, and can be large but this possibly helps : https://view.officeapps....amp;wdOrigin=BROWSELINK


I would strongly support the general response of "come clean" and also that the tax payer does the disclosing, not waiting for HMRC to ask. Selling the property does not avoid prior year taxes, will create a new taxable "event" and will not obviate the original problem.

Possibly around half of them if the findings of https://www.theguardian....o-declare-rental-income are representative!

Another "exploit" I'm aware of: an acquaintance in a rented property mentioned "it's really strange, all my landlord's post comes to our address". I pointed out the landlord was probably trying to make it look like the property was still their primary residence to escape paying CGT on it at some point in the future (also suggested they shop them to HMRC, but not sure if they ever did).