Non Declared Tax

[royboy2012xx]

Please help i have made a big mistake and not filed any self assessment tax forms for secondary income i have received in the past 3 years. I am employed already and built a few websites on the side not fully realising the imapact of not declaring the income. I think i owe between £1600-£2000, and i expect i will also have to pay penalties. I want to pay, but am worried that my employer will find out and what hmrc will say. I realise my mistake now and want to end this - please help.

[Gbarbm]

There is no reason why your employer would find out from HMRC...data protection and all that.

My advice would be as follows;

Gather together all your paperwork relating to the self employment to include

invoices, bank statements detailing payments made in respect if the self employment. Allowable expenses such as Advertising, stationary etc which you can offset against the profit.

Once you have an idea of the net profit write to HMRC making a voluntary disclosure.

You will have to pay tax (as presumably all your personal tax allowance or free pay has been utilised against your PAYE income) and NI and also interest at HMRC official rate which is about 5%, as compensation to HMRC for loss of the use of the tax/NI over time.

You may also gave to pay a penalty but this can be reduced to nil in certain circumstances.

You can also discuss a time to pay arrangement with HMRC

[royboy2012xx]

Thanks for the advice. I phoned them this morning and asked to make a Voluntary Disclosure. They told me they would send me a form with a voluntary discoloure number that i would need to fill in. I would then be able to use this number to complete my returns online within 60 days and use an online calculator that will calculate exactly what i owe. They also said that i would need to select the level of penalty, and recommended that most people in my position go for 10% - which seems more than fair to me. Thanks so much for the advice, so glad i got this in the open. It looks like it wont be as bad as i thought and i can just pay the tax and the penalty, move on and learn from my mistakes.

 

cheers

[Gbarbm]

I'm so pleased you've rung and sorted it and that it wasn't as bad as you thought it was going to be!

 

Just for your info, the penalty regime is as follows;

 

The disclosure is unprompted as it has been made at a time when you had no reason to beleive that HMRC have discovered or are about to disccover the inaccuracy or under assessment.

An unprompted disclosure brings you into the lower penalty bracket based on your behaviours;

 

Reasonable care - no penalty

 

Careless - 0% to 30%

 

Deliberate - 20% to 70%

 

Deliberate and concealed - 30% - 100%

 

The percentages will apply to the actual duties payable.

 

These penalties can be reduced based upon the quality of the disclosure:-

 

Telling - admitting, disclosing and explaining the inaccuracy/under - assessment (up to 30% reduction)

 

Helping - give HMRC assistance in quantifying the inaccuracy, positive assistance, volunteering information (up to 40% reduction)

 

Giving access - responding to requests for info and documents promptly - (up to 30% reduction)

 

So I would say the 10% is a reasonable suggestion by them.

 

Take care and thanks for letting us know the outcome.

 

Gbarbm