Declare your gains or risk facing enquiry from HMRC
Published at 14:34, Friday, 29 June 2012
Just over two weeks ago the latest HMRC disclosure campaign came to an end.
This most recent in a long line of similar campaigns allowed online traders to register their intention of disclosing the income they had earned which hadn’t suffered tax with HMRC.
This adds these traders to the growing list of businesses including electricians and those in the medical profession who have been encouraged by HMRC to make an early disclosure of their untaxed income in exchange for a lower penalty.
The most recent press release clearly shows why the HMRC favour such campaigns with over £510 million being raised from voluntary disclosures and a further £125 million from follow-up activity.
HMRC also confirms that outside these voluntary disclosures there have been more than 18,000 investigations with more than 4,600 still on-going.
For those who have not disclosed in this most recent opportunity the message is very clear; you could face penalties of up to 100 per cent of the tax and in very large cases possible criminal investigation.
However, one of the reasons that some traders don’t disclose their income is the assumption that every individual understands their tax obligations when they start a business and often this isn’t the case. Many people who run a business are so concerned with ensuring that there is a demand for the product or service they are selling, sorting out financing for the business and dealing with an ever-growing raft of other legislation, that often their own tax affairs are understandably forgotten.
HMRC can start an enquiry for no reason whatsoever and when the letter falls through your letter box telling you they are intending to look through your affairs it can feel like you’ve been singled out from the crowd.
The letter may give some clue as to what HMRC’s concerns are in relation to your tax affairs, perhaps asking for details of your bank interest, or a capital gain, although it is not unusual for the letter to ask for a great deal of business and personal information, which can mean that the focus of the enquiry is unclear. The most important thing to do is to draw the relevant information together and seek professional advice.
This advice is almost always money well spent as it will often lead to a better result especially on areas of tax where the law is unclear. It will help you deal with the exchanges of letters, requests for further information and meetings aimed at bringing the enquiry to a close.
There is no set format for an enquiry to follow as each one will be based around the circumstances of that individual, and so with significant sums being raised for the exchequer from these campaigns HMRC are unlikely to stop. Anyone who has not declared all their income or gains needs to get the professional advice they need now ,before the dreaded brown envelope falls through the letterbox.
If you would like further information on any tax matters email Armstrong Watson at moneymatters@ armstrongwatson.co.uk or call freephone 0800 195 2161.
Published by http://www.cumberlandnews.co.uk
- Angry Cumbrian MP and council leader write to David Cameron about Sellafield deal (7 comments)
- Cumbrian hospital operating theatres to stay shut after alert
- Crash blocks busy Cumbrian road junction
- Benefits fraud woman sentenced by Cumbrian court
- Plan to build 50 homes in West Cumbrian village (5 comments)