Synopsis: HMRC has launched a new campaign with the aim of providing an opportunity for individuals in employment who have additional untaxed income from other sources to get up to date with their tax affairs in a simple, straightforward way.
Date posted: Monday, May 12, 2014
In April, HMRC launched the ‘Second Incomes Campaign’ to ‘help those that are not paying the correct amount of tax to put that right’. This campaign invites voluntary disclosure of untaxed income from those who are in employment and but have additional income from other sources that has not been taxed through PAYE.
Examples of possible second income sources cited in HMRC guidance range from fees from consultancy and income from activities such as hairdressing to profits from spare time activities such as making and selling craft items and buying and selling goods through regular car boot sales.
As with all HMRC disclosure campaigns, those who take part need to tell HMRC about all income, gains, tax and duties not previously disclosed. Penalties under the scheme range from 0% to 20% according to the circumstances of the non-disclosure with higher penalties applying where taxpayers have deliberately concealed information; however where penalties do apply they are likely to be significantly lower than they would be if no disclosure is made but HMRC uncovers the error at a later date. Back tax bills will in most circumstances be cut off at six years, but HMRC says there is no guaranteed immunity from prosecution in serious cases.
The campaign does not extend to rental income from a second property which should be disclosed in accordance with the terms of the Let Property Campaign.
As on previous occasions, once the campaign closes (on a date yet to be specified) HMRC will use the information in its possession to identify and come down hard on those who it believes have something to disclose but who have failed to take advantage of the opportunity offered. Clients with significant undisclosed income should therefore take advice as soon as possible with a view to making an accurate and complete disclosure under the campaign.
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