HRMC have a number of ways of finding out about your undeclared income
Birmingham, West Midlands (PRWEB UK) 24 November 2017
During the final few weeks before the upcoming self-assessment deadline, lots of individuals, sole traders, land lords and contractors are doubtlessly eager to ensure they stay on the right side of the law, and avoid being slapped with hefty fines because of improperly declaring their taxable income.
As of 2015, the taxman has unprecedented access to your finances and lifestyle choices, with startling new software capable of trawling through acres of complex data in the quest for undeclared income. Not only that, but the same software has been rolled out to some 60 countries globally, meaning there truly Is no hiding place for undeclared earnings in need of taxing.
Self-assessment can be tricky to get right, and many small business owners and self-employed people struggle to understand how best to navigate the complexities of declaring every sum they have earned. Yet avoiding declaring every single penny can now come with big - and often unexpected - consequences.
“HRMC have a number of ways of finding out about your undeclared income,” says Aatif Managing Partner at Birmingham and London-based accountancy firm The Accountancy Solutions. “Some are the same tactics they’ve been using for years, but others are much more technologically advanced – and many workers aren’t yet aware of the reach which the government now has when it comes to finding out whether your declarations are accurate.”
This new taxation software goes by the name ‘Connect’, and it’s as speedy as it is effective. Costing £80m to develop and taking the best part of a decade to complete, this high-tech gadget rifles through not only bank databases but both personal and commercial information, unearthing income, transactions and any undeclared assets in seconds – before displaying this all to HRMC.
How is this possible? Several factors are at play, prompting panic amongst those undergoing self-assessment. Taxation has become rather topical in recent years, whether through high profile instances of unpaid tax such as the case against the Glasgow Rangers – which made it all the way to the Supreme Court – but this filters down to the growing numbers of self-employed people in the UK gig economy, who may simply never have filed taxes before and are therefore unsure how to go about it correctly.
“We always advise people to speak to a specialist if they want to avoid getting into hot water,” says Aatif. “HRMC runs disclosure schemes, allowing traders to declare undisclosed income – but their effectiveness is questionable. Speaking to a professional tax associate gives you access to experts who can help to reduce penalties should they occur, or even help you avoid them altogether.”
Whether you’re anticipating a notice of undisclosed income or eager to get your taxes right, staying aware of the common pitfalls, understanding HRMC’s new capabilities, and speaking to the professionals when necessary should help traders of all levels stay in the taxman’s good books.