Taxpayers with multiple income streams
HMRC has been targeting individuals in employment who have additional untaxed sources of income. The Second Incomes Campaign offers individuals the opportunity to inform HMRC that they have undeclared income from a supplementary income stream.
The HMRC guidance lists the following possible examples:
- fees from consultancy or other services such as public speaking or providing training;
- payment for organising parties and events or providing entertainment;
- income from activities such as taxi driving, hairdressing, providing fitness training or landscape gardening;
- profits from spare time activities such as making and selling craft items; and
- profits from buying and selling goods, for example regular market stalls, boot sales, etc.
There is currently no end date for this campaign but taxpayers that make a disclosure will have four months to calculate what they owe and to make a payment to HMRC. Making a disclosure to HMRC as part of the campaign will allow taxpayers to take advantage of the best possible terms.
HMRC will focus on the non-compliant taxpayers who chose not to take up the opportunity to avail of the campaign. Taxpayers will be actively targeted by HMRC using cutting-edge tools such as ‘web robot’ software to search the internet and find targeted information on taxpayers’ activities. The penalties can be as high as 100% of the additional tax due (200% for offshore related income) and there is also the risk that HMRC may carry out a criminal investigation.