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The Taxman Says “Time To Come Clean”

HMRC have released latest figures indicating a record £517.7billion collected in Tax for 2014/15, an increase of more than £12billion than the previous year.

According to HMRC, 66% of this increase was obtained from additional Tax compliance, with HMRC actually prosecuting 1,289 cases and securing a collective 407 years in prison sentences, (source : Taxation, 30/07/15).

So, if you do know of anyone who has no desire to become the cellmate of Norman Stanley Fletcher (aka Ronnie Barker, from the hit 70’s comedy series, Porridge), now is the time to come clean.

To help with this, HMRC have put in place a ‘Second Income Campaign’. This is an opportunity for individuals to bring their Tax affairs up to date if they have additional income that is not Taxed through their main job, or Taxed under another PAYE scheme.

HMRC promote the main advantage of the ‘Second Income Campaign of being that it helps people with undeclared income to get up to date with their Tax affairs in a fairly simple and straightforward way, and to take advantage of the best possible settlement terms. But please note this ‘Second Income Campaign’ applies to only UK Taxpayers, so it would be unlikely that Sepp Blatter, President of FIFA, would be allowed to participate if for some reason he felt the need to apply.

But surely there will be some pain here in the form of Tax bills? So what are the advantages of applying for this Campaign?

Well yes, there will be the Tax to pay up on the undisclosed second income and yes, there will be interest automatically charged by HMRC on the late payment of this Tax. But, it is the penalty position on the Tax amount where the main advantage of using this Campaign applies. If no voluntary disclosure is made and HMRC do identify anyone with undeclared second incomes, then they can impose a penalty position as high as 100% of the unpaid Tax!

HMRC have stated they are specifically targeting Tax evasion through undisclosed second incomes, and have given the following examples of what they are targeting:

  • Fees from consultancy or other services.
  • Payment for organising of parties, events or other entertainment.
  • Income from activities such as hairdressing, taxi-driving, gardening.
  • Profits from spare activities such as making and selling crafts.
  • Profits from buying and selling goods, for example regular market stalls and car boot sales
  • E-Bay and internet trading.

It may be argued looking at these activities, that they are hardly the type of activities that would have convicted Ronnie Biggs or The Kray Twins, but would be more clearly aimed at the activities of Del Boy and Rodney Trotter (Only Fools and Horses), or Claude Greengrass (Heartbeat).

Careful handling of the process for applying for and settling with HMRC under ‘The Second Income Campaign’ is required, particularly understanding the time limits involved.

The timespan between making the formal application to join the Campaign and submitting all information to HMRC is 16 weeks, exactly the same length of time that Bryan Adams topped the charts in 1991 with (“Everything I Do,) I Do For You”, and only one week longer than Wet, Wet, Wet “Love is all Around”, that managed 15 weeks at number one in the charts in 1994. – incidentally the above Wet Wet Wet single only reached number 9 in the UK all-time best selling singles. I will leave you all to puzzle out the other 8 singles above Marti Pellow’s hit (and no before you ask, I wasn’t a fan of Wet Wet Wet and never bought the single!)

So, finally if you do know of anyone who wishes to “come clean” about their Tax affairs, then please ask them to contact me and I will help them get their Tax affairs up to date before the Taxman comes knocking!

Rickey

Rickey Cooper FFA, FMAAT, ATT

JCL – Jones Cooper Limited

 

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