HMRC TARGET PEOPLE WITH SECOND INCOMES
Employees who have undeclared income from self-employment can notify HMRC and ‘come clean’
HMRC has launched a new campaign aimed at people who are employed but also have income from self-employment which they have not declared say Harris & Co accountants Northampton, the specialist small business accountants.. Like all HMRC’s campaigns, the Second Incomes Campaign aims to encourage people to come forward and bring their tax affairs up to date. If they do not use the opportunity to make a voluntary disclosure, and HMRC catches up with them later, they face heavier penalties and possibly prosecution.
Many employees with a second income will already pay tax on it via self assessment or their PAYE codes. This is aimed at those who have such taxable income but have not declared it to HMRC.
HMRC gives examples of what counts as a second income:
· consultancy fees, eg for providing training
· organising parties and events
· providing services like taxi driving, hairdressing or fitness training
· making and selling craft items
· buying and selling goods, eg at market stalls or car boot sales
As in most campaigns, there are two stages to making a disclosure:
· notifying HMRC, and then
· making the disclosure and paying the tax plus interest and penalties.
In this campaign there are no fixed deadlines by which everyone must notify and then disclose. Instead, the opportunity will be open for some time, and the deadline is that you must disclose and pay within four months of receiving HMRC’s acknowledgement of your notification. HMRC will allow more time to pay in suitable cases.
The number of years for which disclosure is needed will depend on how the tax came to be underpaid. For those who have taken reasonable care, it is four years (or from when the error arose if later); for those who have been careless, up to six years; and for deliberate behaviour (in effect, fraud), up to 20 years.
Those who have undeclared income but are not covered by a current HMRC campaign can still come forward: call the Campaigns Voluntary Disclosure Helpline 0300 123 1077.