We have been advised by our tax advisor (ex UK) that although we rent a property in the UK we didn't need to submit a tax return for 2010/11. We received several penalty notices and I spoke to the Inland Revenue in March and was advised we needed to submit returns. I passed this information onto our tax advisor and forwarded copies of the penalty notices and he still insisted we should ignore them and they would eventually stop sending them. I raised my concerns when the total amount owing was 2k GBP and he agreed he would complete tax returns for 2010/11 and would make sure the tax office didn't send further returns. Today I have received another penalty notice amounting to 2.6k GBP. I rang the Inland Revenue and they insisted returns had to be submitted and that even if we appeal the summons would still have to be paid. I explained that the property hadn't made any profit throughout the year so we didn't owe them any monies but apparently the nil liability rule has changed and even if we don't owe tax we are still liable to pay penalties for not submitting returns.
We are so as we went with an ex UK advisor due to complications of having UK property. Has anyone else had any experience of this or can offer some advice. We will appeal but it doesn't look like we've got any chance of them cancelling the penalties due to bad advice from our tax advisor.