HMRC is offering individuals a tax amnesty when they come forward and communicate previously undisclosed second incomes, in return for reduced penalties.
This is one of a number of tax amnesties HMRC has offered over recent years. Penalties are normally substantially reduced if a voluntary disclosure is made under these schemes, instead of penalties of up to 200% of any tax owed if the tax office discovers the income itself.
The second income amnesty is open to individuals in employment who have an additional untaxed source of income.
Examples of second income could include:
- Fees from consultancy or other services such as public speaking or providing training
- Payment from organising events and parties or providing entertainment
- Income from activities such as taxi driving, hairdressing, providing fitness training or landscape gardening
- Profits from buying and selling goods, e.g. regular market stalls, car boot sales etc.
It’s also important to be aware of the point at which HMRC considers your hobby to be a business. More information can be found in this blog post.
If you are considering making a disclosure, it is strongly recommended that you seek professional advice. For a free, confidential initial consultation, please contact us and speak to Anthony Middleton today.