Second Income Campaign
The HMRC Second Income Campaign is aimed at employed individuals who are receiving a second or additional income which they have not yet declared to HMRC.
This is an opportunity for those individuals to come forward and disclose their additional earnings to HMRC for the periods in which additional income has been received but not taxed.
Some examples of the types of additional incomes this would include (but not limited to these) are:
- Consultancy fees for advice, training, public speaking etc
- Event organising/providing entertainment
- Network marketing/Direct sales
- Online sales (Ebay, Amazon etc.)
- Making and selling craft items
- Taxi driving
- Fitness training
- Hairdressing/Beauty treatments
- Any other activity run on a commercial basis to bring in a profit (this would include any profits made from what you may have once deemed as a “hobby”)
The criteria for an individual to take part in this disclosure facility are as follows:
- UK resident
- Have an untaxed source of additional income
To take part in the Second Income Campaign, a notification needs to be made to HMRC (by the individual or their advisor) of their intention to take part and make a disclosure of their additional income(s). Please note if there are any other sources of untaxed income these must also be disclosed at the same time.This type of disclosure is classed as unprompted (voluntary) and therefore attracts an additional reduction in the percentage of penalty due if appropriate.
Once notified HMRC will then write to accept the individual into the process and provide a unique reference number for the disclosure. HMRC then allow 90 days for the disclosure to be prepared and submitted with payment. There are some circumstances when it may be possible to extend the time period to complete the disclosure and also to request additional time to make payment of what is due.
Once the disclosure is submitted, HMRC have the opportunity to ask questions, ask for further information to support the figures or challenge the penalty. But having completed hundreds of these types of disclosures, we find that if the appropriate work is undertaken on calculating the figures, consideration is given to the individual’s
tax affairs as a whole, and if the supporting documentation is good, then most cases are accepted by HMRC.
We can manage the whole process for the individual and deal with HMRC on their behalf, and provide the expert advice needed to ensure the individual is informed and that the process goes smoothly.
- We can prepare the disclosure and calculate the profits/losses – we can ensure that as well as declaring the additional income that deduction is also received for all appropriate expenditure too
- We often find when dealing with these types of cases that not all records have been kept and this can be worrying for the individual. We specialize in working with incomplete records to arrive at the appropriate amounts to be disclosed. We can help and advise on what information can be used and what estimates and assumptions are reasonable to make
- We can advise on and calculate the appropriate penalty level which is dependent on a number of factors and this is unique to each individual, depending on whether they have ever filed tax returns or not, and factors which are relevant to the circumstances which led the individual not to disclose earlier
- Payment of any taxes is due 90 days after HMRC acknowledge the notification. In certain circumstances, unique to the financial position of each individual, we can help negotiate a time to pay arrangement if appropriate
Please note it is also important that an individual registers to file future self assessment tax returns at the same time as HMRC do not in our experience automatically
do this. This ensures the individual minimises any further possible penalties for late notification.
Gilbert Tax understands that people sometimes make mistakes in their dealings with HMRC and that HMRC make mistakes in dealing with taxpayers. Many people do not know how to deal with HMRC or who to turn to for help resolve the tax dispute.
Gilbert Tax is a firm of tax advisors who specialise in resolving people's problems with HMRC. We have extensive expertise in dealing with all forms of tax investigations and tax disputes as well as with taking matters to the Tax Tribunal where agreement cannot be reached.
Gilbert Tax deal both directly with the individual who is under enquiry and also work with many firms of accountants supporting them in dealing with HMRC disputes and advising them on how to handle HRMC to get the best result.
The fact is that proper management of HMRC is the best way of reducing the tax, interest and penalty as well as the time taken in resolving any tax dispute.
Gilbert Tax are none judgemental and rigorously defend your position within the scope and parameter of the law. We take control and manage the process to minimise the interruptions that any form of tax investigation causes to an individual's life and business.