A recent campaign aimed at people who are employed but also have income from self-employment which they have not declared has been launched by HMRC.
This new campaigns has been christened the “Second Incomes Campaign” and aims to encourage people to come declare secondary sources of income to HMRC. If they do not use this opportunity, and HMRC later discovers the second income they will face heavier penalties and even prosecution.
Many employees with a second income will already pay tax on it via self assessment or their PAYE codes. This initiative however is aimed at those who have additional income but have not declared it to the Tax Authorities.
HMRC gives some examples of what counts as a second income:
- consultancy fees, eg 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, eg at market stalls or car boot sales
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.
If you are in any doubt about whether or not you have additional sources of taxable income, contact our Tax Experts on 0845 177 5500 or using our on-line contact form for a free initial chat.