Do you have any undeclared income?

If so, you may be able to take advantage of HMRC’s latest tax return amnesty.

In their most recent campaign to crack down on undeclared income HMRC are encouraging taxpayers who have not or are not declaring all of their income sources to them to come forward in return for a reduction in penalties.

What’s happening?

HMRC have recently invested heavily in both new technology and personnel in their tax avoidance and evasion team, massively increasing the resource focused on targeting tax payers who may have undeclared income.

Should they discover that you have not declared all of your income sources, HMRC will calculate the tax they believe you owe and issue a demand for payment within a short time frame. They will not necessarily include and subsequently offset any claims that you could potentially make in these calculations.

What is the potential cost?

In addition to requiring payment of these liabilities within the tight time frame, HMRC also have a variety of penalty options available to them, including:

• £100 fixed penalty for late or non-notification of requirement to complete tax returns;
• £100 fixed penalty for late or non-submission of tax returns;
• Daily penalties of £10 for late or non-submission of tax returns (for a maximum of 90 days);
• Further £100 fixed penalty for submissions more than 6 months late;
• Discretionary penalties of up to 100% of the lost tax.

And of course, they charge higher than base rate interest on all the tax liabilities and penalties which is backdated to the original due date.

What should I do?

Some or all of these penalties can be avoided by informing HMRC of your circumstances before they find you.

By approaching HMRC, you can ensure all claims for reliefs and expenses are made to minimise your liability. You will also receive a reduction in penalties for coming forward and informing them.

If you are concerned that this might apply to you, please do not hesitate to contact us for assistance.

If you would like any assistance in this or any other tax matter, please contact Karen Robinson (karenrobinson@cullenwealth.co.uk) or 0161 975 6700.