The Second Incomes Campaign is now one of the three current HMRC Tax Disclosure Campaigns encouraging people to cough up the tax due on undeclared income. It is aimed at people who “moonlight”. That is, people who have a primary source of employment income (i.e. a day job) but then work part-time in another role.
The “Second Incomes Campaign” offers moonlighting employees the chance to declare their 2nd source of income to the taxman: in a straightforward way. And as the taxman will treat this as a “voluntary disclosure”, it comes with the promise of low tax-geared penalties.
Do I qualify for the Second Incomes Campaign?
You can take part in the HMRC Second Incomes Campaign if you are a UK resident employee, and have additional income from working for yourself; and your 2nd source of income has not already been taxed (e.g. through PAYE).
Second sources of income are still taxable even if: the work is done for friends and family at “mates’ rates” but you are making a profit; or if the work is being done “on the side”, say for a client or customer of your employer, without your boss’ knowledge.
HMRC provides a number of examples of sources of second income: e.g. consultancy fees (such as providing training); organising parties and events; providing services like taxi driving, hairdressing or fitness training; making and selling craft items; buying and selling goods (such as at market stalls, car boot sales, or online).
What are Tax Disclosure Campaigns?
HM Revenue & Customs’ Tax Disclosure Campaigns are short-lived tailored tax disclosure opportunities aimed at specific groups of taxpayers. During the Campaign window targeted taxpayers can make a full disclosure of tax irregularities using a simplified method.
The targeted groups change on a rolling basis: as each Campaign typically lasts around 6 months. The Campaigns typically offer a simplified way of making a disclosure and payment of underpaid tax. Reduced penalties are charged, and there is a guarantee of non-prosecution for anyone making a full disclosure under the terms of the Campaign. Typically in a Campaign, HMRC are only looking back 6 years – however they do have the statutory right to go back 20 years in all cases.
HMRC choose their target groups then gather information and intelligence that can be used to encourage and influence that group to come forward. Once a Campaign closes, HMRC then uses that same information and intelligence to follow up with action that can include higher penalties, naming and shaming, or even a criminal tax investigation, aimed at those who choose not to confess under the Campaign terms.
How can Lynam Tax Disclosure Experts help me?
If you are in a sector targeted by an HMRC Campaign you may need assistance with your disclosure. In any event, if you have any irregularities in your tax affairs you could benefit from our expert help. Lynam Tax Enquiry Experts have enormous experience of tax investigations and tax disclosures.
For a confidential and free initial discussion phone the experts now:
Paul Lynam: 0845 643 9997
Andrew Nutbrown: 0771 877 8710