Avoid being hit with fines by revealing your income
THOSE earning a second income through self-employed work should declare their income to HMRC or risk significant fines and prosecution, according to chartered management accounts firm.
Last week HMRC launched its Second Incomes Campaign, targeting those who earn additional income through self-employed work outside their normal day job.
And RiverView Portfolio (RP), which has an office based in Tetbury and Cirencester, believes people in the district who earn money in their spare time could be caught out by this new initiative.
Mark Barrett senior consultant at RP said: “What HMRC tends to do is execute the campaigns regionally, taking areas one at a time. They don’t announce which areas they’re approaching but it could be anywhere, so people in Gloucestershire should be aware of the campaign.
“They look for adverts in local newspapers, find people who do craft, or run stalls in market, or provide services like fitness training or landscape gardening. Then they contact the person running the business, find out what they need to know and then start an investigation.
“Of course, we are not trying to discourage people from having more than one stream of income. But if they are, they need to pay tax on that income and they need to register as self-employed with HMRC.
“If people haven’t been paying tax, then there are penalties to pay – but these penalties will be lower if you go to them yourself, higher if HMRC has to come to you and even higher if you deliberately hide information from them once they’ve started an enquiry.
Mr Barrett explained that the lowest penalty people could face is 30 per cent of their unpaid tax liability and the maximum is 100 per cent.
He added that because of this people are better off admitting a second income, rather than waiting to be investigated and fined heavily.
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