Advice - Tax Evasion (well it seems it to me anyway)

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Hi all, been a member of the RLA for many years and would like to ask your advice for a mate of mine. Note this does not apply to me, I am squeeky clean and pay tax on my property portfolio but this applies to an fairly old couple local to where I live:

"5 years ago Man meets woman, woman moves in with man. women rents her old place (mortgage free) for next five years and a year ago woman marries man. Today letter from HMRC arrives for woman in married name to say, we note you rent a property in your unmarried name but we have no record of you renting it on your tax return (note she has never submitted a tax return in her life)."

Now the old lady is panicking. And rightly so .. to me this is evasion.

Having never evaded tax in my life I have no advice to give her except be honest with the HMRC man.

Has anybody been through a similar thing, will they take her expenses over the last 5 years into account (apparently she spent fortunes on repairs to a roof, etc etc etc and has receipts). Or will the HMRC say "evasion" you us X in tax and another X for avoiding the tax in the first place?

Your thoughts would be appreciated.

Many months ago they told me about the property and I told them to declare it on a tax this! :-)
thanks for any help/advice you can give. Les

The HMRC letter said :

"I understand that you may have received income from property letting but I am unable to find any record of this income has been notified to HM Revenue & Customs.

Please call me on the above number, within the next 14 days, to clarify the position I will need the following information.

The addres/es of the let property/ies.

The date of purchase or acquisition of each property and the purchase price.

The date each property was first let.

The amount of any mortgage on each property and whether repayment or interest only.

Whether you are the sole or joint owner of each property and if joint the other owner’s name and address.

Approximate amount of rental income received each month.

If the property/ies have been sold the date and the sale price and give details of when you lived in the property.

A contact phone number to minimise your costs.

A soon as I have had a response from you I can decide what records are required and deal with any taxation implicaions that may arise from this, if any.

To help us improve customer service, please quote our reference number and provide a daytime phone number in any correspondence."

01/06/2009 00:00

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