HM Revenue & Customs (HMRC) actively runs campaigns to target tax avoidance and ensure compliance among taxpayers. These campaigns offer taxpayers a chance to come clean about undeclared income or incorrect tax filings, usually under more favourable terms than if discrepancies were discovered during checks.
Here’s an overview of some current HMRC campaigns and their implications for taxpayers:
Dividends and Distributions
HMRC has launched a nudge campaign focusing on company owners who may have under-declared dividend income. The campaign is part of HMRC’s increasing use of “nudge” tactics, which encourage taxpayers to self-assess their tax returns for accuracy and completeness .
Online Marketplaces and Digital Content Creation
Another campaign targets income earned from online marketplace sales and the creation of digital content. These initiatives are based on third-party information held by HMRC and cover global jurisdictions, not just the UK. They require individuals to either make a disclosure or confirm their tax position if they’ve generated income from these activities .
Second Incomes
This campaign is aimed at individuals with undeclared supplementary income streams, targeting those in employment who have additional untaxed sources of income .
Let Property Campaign
Landlords with undeclared income from residential property lettings are the focus here, with the campaign open to landlords of all types, including those with multiple or single rentals, and those specialising in student or workforce rentals .
Credit Card Sales Campaign
Targets individuals and businesses that accept credit and debit card payments and have undeclared income associated with these transactions.
Taxpayers participating in these campaigns can benefit from potentially reduced penalties and a more straightforward process to declare unpaid taxes.
However, it’s important to note that once targeted by a campaign, taxpayers may not use subsequent campaigns to disclose liabilities related to the same or different income streams. Additionally,
HMRC has updated its guidance for those needing to make a disclosure outside of these specific campaigns, urging anyone who has deliberately evaded taxes to take action and make a voluntary disclosure .
The implications for taxpayers are significant. Participating in an HMRC campaign can offer a more lenient approach to settling tax liabilities and may help avoid more severe penalties or legal action that could arise from HMRC investigations discovered outside these campaigns.
However, it’s crucial for taxpayers to carefully review their tax affairs and consider seeking professional advice to navigate these processes effectively and ensure compliance with UK tax laws.
If you need further advice on any of the above please contact us.