May 27th, 2016
HMRC Announce “Second Income” Campaign
HMRC like campaigns aimed at people coming forward and declaring untaxed sources of income. Over the years we’ve had over a dozen campaigns aimed at, amongst others, those with offshore investments, plumbers, electricians and landlords. In the eight years up to 31 January 2015 the various campaigns have generated just over £1bn of additional revenue for HMRC.
Today sees the announcement of the latest campaign, this time focussing on those within PAYE who receive a second untaxed source of income. Some common examples of second incomes cited by HMRC include:
- Fees from consultancy or other services, such as public speaking or providing training
- Payment for organising parties and other events
- Income from activities such as taxi driving, hairdressing, fitness training or landscape gardening
- Income from hobby trades, such as selling craft items
- Profits from buying and selling goods, such as market stalls and boot sales
Underpaid and late tax is subject to penalties and interest on a sliding scale. Penalties are charged as a percentage of the underpaid tax and range from 0% to 100% according to the circumstances and behaviour of the taxpayer, or non-taxpayer as the case may be.
Disclosures of unpaid tax under this campaign, in fitting with the other campaigns, will be subject to a more lenient approach from HMRC with penalties ranging from 0% to 20% for a voluntary disclosure. If HMRC get wind of the second income before a voluntary disclosure is made then all bets are off so it is important that those in receipt of untaxed income don’t bury their heads in the sand.
This is something we can help with so do please get in touch.
