May 27th, 2016HMRC 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.
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