I like to give you, our readers, some heads up when it comes to specific campaigns that the HMRC runs in order to recover revenue in particular areas.
In this post I’m sharing about the Campaign that HMRC has launched to target people who are employed and have not declared income from self-employment.
Like all of HMRC’s previous campaigns, the Second Incomes Campaign is to encourage people to 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 campaign 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, e.g. 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 (like at market stalls or car boot sales for example)
As in most campaigns, there are three stages to making a disclosure:
- notifying HMRC that you earn a second income
- physically making the disclosure and then
- paying the tax plus interest (and any penalties due)
In this particular 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.
There is more information in this HMRC leaflet for you: Second Incomes Campaign: Your Guide to Making a Disclosure
HMRC also has a Second Incomes Campaign Helpline: 0300 123 0945.
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