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Untaxed Second Income? The Taxman cometh!

If you’re employed and have additional income that’s not taxed, HM Revenue & Customs (HMRC) is currently operating a Second Incomes Campaign which gives you the chance to bring your tax affairs up to date via a voluntary disclosure.

To get the best possible terms, you need to tell HMRC that you want to take part in this campaign. You’ll then have 4 months to calculate and pay what you owe. If you don’t make a voluntary disclosure and HMRC finds out later that you owe tax, you could face higher penalties or even criminal prosecution.

You can take advantage of this opportunity if:

  • you’re an employee
  • you’re resident in the UK
  • you have additional income from working for yourself, and …..

You have a second income coming from activities such as these:

  • consultancy fees and fees for providing training
  • organising parties, conferences and events
  • providing services like taxi driving, hairdressing or fitness training
  • making and selling craft items
  • buying and selling goods, eg. at market stalls, car boot sales, auctions or on Ebay.

Now is the time to tell HM Revenue and Customs (HMRC) if this additional income hasn’t been taxed through either:

  • your main job
  • another Pay As You Earn (PAYE) scheme
  • Self-Assessment.

You can visit the HMRC website to get more information and watch a ‘Do you have a Second Income?’ video. You may also want to get some local advice from your accountant or financial adviser. The HMRC website also allows access to an online calculator to help you work out what you might owe if your tax affairs are relatively straightforward. There is also a facility to produce figures if you are entitled to only basic personal allowances and a different calculator if you need to tell HMRC about more than 5 years of unpaid tax.

You can inform HMRC about additional untaxed income by filling in a notification form and then once HMRC have acknowledged your notification, a disclosure form showing what you believe you owe and what you believe you can pay within four months. HMRC also offers the Second Incomes Campaign Helpline if you need more help, and if you need more than 4 months to pay what you owe, the helpline is offering assistance.

 

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