Tradespeople targeted by HMRC to declare earnings or face tough penalties
Plumbers, gas fitters and heating engineers are the latest to be targeted by a campaign from HM Revenue and Customs (HMRC).
Tradespeople are now being told to declare their earnings by the end of May or risk being clampdown upon by the taxman.
If tradespeople have tax to pay which has not yet been disclosed to the HMRC they are being encouraged to tell the HMRC department by the end of May and make a full disclosure of what they owe. If they make a confession of their past unpaid tax then most will face a lower penalty charge which is to be 10% and a maximum 20% of the money unpaid.
Those that want to take advantage of the offer must get in touch with the HMRC by the 31st May and register with the HMRC to ‘notify’ that they plan to make a voluntary tax disclosure. By 31st August those that have registered must have told HMRC about the tax they owe and how they have made arrangements to pay the interest and tax penalties.
Those that come forward before the deadline would only have their records from the last five years studied by the HMRC rather than the current average of 20 years, unless criminal offence is suspected. Those who fail to come forward will be facing targeted investigations by the HMRC with fines of up to 100% of the unpaid tax and even criminal prosecution could follow.
Mike Wells, HMRC Director of risk and intelligence said, “Our aim is to make it as easy as possible for plumbers to come forward, make a full disclosure and benefit from a reduced penalty,’
“We will be using various intelligence sources to target plumbers who have not declared their full income. I strongly urge any in this group who think they may owe tax on their income to get in touch with HMRC and get their tax affairs in order simply and on the best available terms’¦The message is clear. Contact us before we contact you.’
The Plumbers’ safe tax plan is the first initiative in a campaign focused on tradespeople, designed to make it easy for those in the plumbing industry to come forward and put their tax affairs right. Plumbers can let HMRC know that they intend to make a tax disclosure by visiting www.hmrc.gov.uk/plumberstax-safeplan or calling 0845 600 4507.
Matt Holmes, MD of Liquid Accounts says, ‘Regardless of the what the HMRC say, there are clear benefits for SMEs from better record keeping. It is a proven fact, that businesses are more likely to succeed if they keep good accounting records as they’re able to see instantly if they’ve got enough money coming in, if people are paying them, and they are able to plan ahead. According to a survey carried out by Yorkshire Forward, 80% of businesses who use computerised accounting succeed whereas 80% of businesses who don’t, fail! The key is to focus on creating business intelligence that you can use to your benefit rather than just keeping records for the tax man because you have to.”
To make your accounting easier in the future you could consider using an online accounting package tailored around small businesses. These are easy to use, instantly accessible, flexible and cheap. By using an online accounting package it will help save you time and money by keeping track of your ingoings and outgoings.
If you don’t have time or don’t really know what you’re doing with your accounts, you could also make use of one of the growing number of freelance bookkeepers or virtual assistants. Obviously there will be a cost involved, but what you’re buying is peace of mind and more time to concentrate on what you do best – earning money.
If you would like more information on Liquid Accounts can help your business contact 0845 450 7304 or email email@example.com. You can also keep up-to-date on all the latest accounting news on our blog, Twitter, Facebook or LinkedIn.