On the 9th April 2014 HMRC launched the Second Income Campaign….
A second income could come from:
- consultancy fees, eg for providing training
- organising parties and events
- providing services like taxi driving, hairdressing or fitness training
- making and selling craft items
- buying and selling goods, eg at market stalls or car boot sales
You need to tell HM Revenue and Customs (HMRC) if your additional income hasn’t been taxed through either:
- your main job
- another Pay As You Earn (PAYE) scheme
- Self Assessment
This is called a ‘voluntary disclosure’. To get the best possible terms you need to tell HMRC that you want to take part in the campaign.
You’ll have 4 months to calculate and pay what you owe.
You can find out about the campaign and how to make a disclosure here
The criteria used to assess if an activity is a hobby or a business are:
- The size and commerciality of the activity.
- The frequency of the activity and transactions
- The application of business principles.
- Whether there is a genuine profit motive.
- The amount of time devoted to the activities.
- The existence of arm’s-length customers (as opposed to just selling your wares to family and friends).
If you have a Second Income its better to disclose it now rather than wait till HMRC find you.
steve@bicknells.net
Business Accountant 