What is undeclared income?
Do you have undeclared income? Maybe you've rented out a house or a flat; done some extra work in the evenings or weekends?
What ever the source of your income. If you haven't yet filed in a tax return and reported this income to HMRC, you have "undeclared income"!
What might happen?
If you have undeclared income, HMRC can impose a number of financial penalties. This can include fines, penalties and interest on the unpaid tax. In serious cases, you may even be subject to criminal proceedings and face imprisonment.
What can you do about it?
The tax rules allow those who have undeclared income to report this to HMRC. In return for making the declaration, HMRC will reduce the level of penalties that you will have to pay.
The key thing to remember is that it is a much easier process to declare the income before HMRC come knocking. If HMRC start an investigation before you can make a declaration and find the undeclared income, you will be subject to much higher penalties, spend a lot longer answering questions and paying large accounting fees.
Our experience shows that most peoples fears of the actual tax they will have to pay are unfounded. In most cases, by claiming the correct deductions, your tax bill might be a lot lower than you think.
We recommend you seek advice today and get on top of your tax matters - why not come in for a free consultation and talk through your options?
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About the author
Kabir Ali CTA ATT is the founding Director at KBR Accountancy.