HMRC has begun to increase their focus on online sellers, gig economy workers and influencers for potential unpaid taxes on income that has not been declared ...
If you receive a nudge letter from HMRC, I advise you to speak to a tax specialist!
They have launched a new 'one-to-many' letter campaign from the week commencing 16th January. It is expected that thousands of letters will be sent out to individuals who have earned a certain amount of money from selling items or services online.
"They could also be creating content for digital platforms!"
The first letter is aimed at those who have sold items or services through online marketplaces, such as eBay or Etsy, or are self-employed drivers that use platforms such as Uber or Lyft. The second letter is specifically targeted at people who have generated income from creating content online, such as authors and influencers.
HMRC has stated that they only intend to contact those whom they believe have earned more than £12,570 from their online sales. However, the exact time period that these earnings were generated is not specified in the letter.
In addition, HMRC will only be able to contact individuals whom they have correctly identified, which may prove to be challenging due to people not always operating under their full given name, or not providing all the necessary information when registering on a marketplace or platform.
The nudge letters state that HMRC believes the individual has not declared all or some of their online income, and ask them to make a disclosure using the digital disclosure service (DDS) if this is the case. It is important to note that the gross sales figure provided by HMRC does not necessarily equate to taxable income.
"The taxpayer may have deductible expenses to set against it!"
If an individual has earned over £12,570, but their net income is covered by the personal allowance, they should still register their trade with HMRC and complete a tax return. I advise you to speak to a tax specialist such as myself rather than making an immediate disclosure in response.
Until next time ...
HELEN BEAUMONT
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about what to do if you've received an HMRC nudge letter, it may be a great idea to give me a call on 01908 774323 and let's see how I can help.
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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