Our client wanted to get his tax affairs in order as he was earning a second income of up to around £30k a year reviewing academic papers. He approached the Bedrock team directly via our website as at the time he didn’t have an accountant managing his tax returns.
Client had earned income over three tax years in addition to his main source of employment which had not been reported to HMRC.
How did Bedrock help?
We obtained all the relevant documents from the client including P60s, income statements, bank and building society accounts and reviewed these to determine the correct amount of income and profit for each year.
We calculated the additional income tax, National Insurance and interest liabilities which were due and registered our client with HMRC’s Digital Disclosure Service.
We completed the online disclosure and proposed an appropriate penalty percentage which HMRC accepted. We referred the client to a trusted accountant with whom we often work for ongoing compliance matters as HMRC’s online disclosure facility would not permit us to deal with the most recent tax year. It was clear that the client would need ongoing support from an accountant.
Business impact and benefits:
We ensured that the client had peace of mind that his tax affairs were up to date. In addition he was happy that the penalty payable was significantly less than it would have been if HMRC had noticed the error and he hadn’t come forward to correct the situation.
Many individuals will have a second income and not all will realise that this results in a tax liability. This is particularly the case if the activity started as a hobby and later became a business.
Give us a call to discuss how we could help you resolve such a situation or read here about HMRC’s interest in identifying tax owed on second incomes.