The eyes of HM Revenue & Customs (HMRC) are now far reaching. In particular they have campaigns and target groups where they focus on individuals with certain types of income. Key areas we are aware HMRC are currently focusing on are:
- Crypto-currency gains
- Rental income
- Status checks (in particular Dentists at present!)
- Contractor loan scheme participants
- Individuals with undisclosed offshore income or gains.
HMRC have powers to obtain information from various third parties, such as letting agents, banks, recruitment agents and in particularly in connection with undisclosed offshore income since October 2017 HMRC have been in receipt of substantial amounts of information as part of the Common Reporting Standard (CRS) from a vast number of overseas countries tax authorities.
If you haven’t declared all your income and HMRC haven’t issued Tax Returns then it is your responsibility to advise them. The best course of action is to approach HMRC ahead of them discovering it themselves. The penalty regime rewards voluntary disclosure.
If your 2017 Tax Return has been issued and not been submitted, penalties increase substantially from 1 May 2018 by £10 per day and can rise to £1,600 if the Return has not been submitted within 12 months of the filing date. In some instances, the penalty can be tax geared and therefore even higher than £1,600.
However, there are some reason to be positive; in February 2018 taxpayers were victorious in appeals against penalties for late submissions of tax returns in 9 out of 13 cases. Knowledge of what HMRC will accept as a reasonable excuse to cancel the penalties or experience in negotiating penalties with HMRC can prove invaluable in mitigation of penalties and appointing tax agents trusted by HMRC can also reduce the chances of being selected for enquiries in the future. We have been successful in mitigating Penalties unfairly issued to our Clients.
So, the message is clear, take professional advice and look to report your income as soon as possible.
If you have recently received a penalty notice from HMRC or you are concerned that you have undisclosed income or unsure whether HMRC might investigate you please contact us on 01473 659777 or e-mail mandy@beatons.co.uk to arrange a meeting.