Thanks for your response
It does matter what wage your wife took - as this is the basis of trying to put matters right, and establishing what income (as employment) was taken, to amend her tax returns from rental income, and to amend yours to include rental income and allowable expenses (of which some would be the wage paid to your wife)
And if she had been paid a wage, then this would show clearly in monies that were paid from you to her (so backed up with bank statements and wage slips) so this creates a paper trail of evidence.
I am confused why your accountant states it doesn't matter what she was paid, it would appear somewhere on the tax return?? What does this actually mean, as you have previously advised that "There may be a discrepancy between the income and the work.
i.e. Some money should have been paid for work.
Some money received was investment income, for which we now know she was not eligible."
So lets look at the facts.
The property was in your sole name, for the period 2003 to 2012 and it was rented out and rental income received
This rental income will be treated as yours by law, and you would be considered liable to tax on net profits. You should have declared all of the rental income on your tax return. So the rental income was either paid TO you or TO your wife.
The expenses that can be deducted from the gross rents, should have been claimed on your tax return - and you advise that a wage WAS paid, so you have evidence of these transactions either through
1) Rents paid to your account and then you paying a wage to your wife OR
2) Rents paid to your wife and her deducting her wages and paying the balance of rents to you
3) Rents paid into a joint account - and your wife took a set amount as a wage
4) Some other scenario
But in ALL cases - PAYE was considered to allow the tax and national insurance deductions from her wages, and this wage along with relevant deductions were reported to HMRC