Taxman targets undeclared second incomes

by Susie Hughes at 08:34 29/04/14 (News on Business)

A new HM Revenue and Customs campaign is targeted at employees with a second source of income, such as consultancy, who haven't paid the tax on it.

The campaign is the latest in a series of targeted tax clampdowns on certain professions or areas. As usual, HMRC adopts a carrot and stick approach, offering the likelihood of more lenient terms if the tax is voluntarily paid and warning that the taxman will be using all resources available to track down offenders. Specifically, the examples given as to the scope of the Second Income Campaign include: Fees from consultancy or other services such as public speaking or providing training Payment for organising parties and events or providing entertainment Income from activities such as taxi driving, hairdressing, providing fitness training or landscape gardening Profits from spare time activities such as making and selling craft items Profits from buying and selling goods, for example regular market stalls, boot sales etc Advertisement HMRC advises: "Regardless of whether the errors were due to misunderstanding the rules or deliberately avoiding paying the right amount it is better to come to HMRC and admit any inaccuracies rather than wait until HMRC uncovers those errors. The Second Incomes Campaign offers the best possible terms available to get your tax affairs in order." TThere are various steps which are outlined in the guidance on how to take part in the campaign: Tell HMRC that you want to take part in the Second Incomes Campaign (Notify) Tell HMRC about all income, gains, tax and duties you’ve not previously told them about (Disclose) Make a formal offer Pay what is owed help HMRC as much as you can if they ask you for more information. HMRC says that it will take account of the level of help provided them and the accuracy of the information given when offering reduced penalties. But after the 'carrot period' comes the 'stick' warning for those who choose not to declare their extra income. HMRC said: "HMRC is targeting tax evasion through second incomes and will use information it holds on its digital intelligence systems to identify people who might not have declared all their income. This will involve HMRC carrying out checks or enquiries to resolve matters. The customers involved will not then be able to make use of the opportunity offered as part of this campaign. "Where additional taxes are due HMRC will usually charge higher penalties than those available under the Second Incomes Campaign. The penalties could be up to 100 per cent of the unpaid liabilities, or up to 200 per cent for offshore related income." Tweet -- If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'. - Susie Hughes © Shout99 2014

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