Are you an employee earning additional income by working for yourself part-time?
Have you previously not paid tax on this earned income? If you are then Steven Glicher accountants would like to draw your attention to the latest campaign from HMRC – the ‘Second Incomes Campaign.’
What is it?
Well, this latest initiative is designed to give professionals earning second incomes the chance to bring their affairs up to date and pay any taxes due on earned income that is not currently taxed.
The new ‘voluntary disclosure’ initiative has been created to give those who are employees, resident in the UK and have additional income from working for themselves, the chance to calculate and pay what they owe back to HMRC at the best possible terms. Any employee who fails to make a voluntary disclosure to HMRC under the Second Incomes Campaign could face higher penalties and even criminal prosecution.
What does HMRC class as a second income?
HMRC has provided numerous examples of what qualifies as a second taxable income, but the following examples are probably the most typical:
- Consultancy fees, for example charges applied for offering training or advice.
- Arranging parties and events.
- The provision of services like taxi driving, hairdressing and personal fitness training.
- Producing and selling craft items.
- Purchasing and selling goods, for example at car boot sales, market stalls or online.
The guidance provided by HMRC is extensive and may seem complicated at first glance, but if you’re struggling to get to grips with the new rules then you can download additional HMRC guidance via this YouTube video, or speak to one of Steven Glicher’s accountants.
To get the best repayment terms from HMRC’s Second Incomes Campaign professionals will need to declare all additional income that has not been taxed through their main job or a PAYE or Self-Assessment scheme. Employees can do this by simply filling in one of HMRC’s notification forms. Employees will also need to complete a declaration form and ensure that they pay any tax due within four months of receiving HMRC’s acknowledgement of the notification form. Any employee requiring more time to pay will have to call the Second Incomes Campaign Helpline (0300 123 0945) before the expiry of the four-month deadline.
How do employees calculate how much tax is due?
Well, if your tax affairs are straightforward and you’re only entitled to basic personal allowances, you can either use HMRC’s income calculator . If you will need to inform HMRC of more than five years of unpaid tax, you should use their alternative calculator. Alternatively you can speak to one of the accountants at Steven Glicher and we will work with you to ensure you only pay what is due.
For further information on the ‘Second Incomes Campaign’ contact Steven Glicher accountants on 0161 845 8007