The following Owner-Managed Businesses guidance note by Tolley in association with Guy Smith of inTAX Ltd provides comprehensive and up to date tax information covering:
As part of its work to reduce tackle non-compliance, HMRC runs several campaigns each year targeted at particular tax risks and taxpayer sectors. Campaigns are targeted disclosure opportunities to give those selected groups of individuals, traders and professionals the opportunity to voluntarily disclose any outstanding tax debt. They generate revenue quickly and secure future tax for HMRC by bringing previously non-compliant individuals and businesses into the system.
HMRC does charge financial penalties on disclosures giving rise to additional tax. Although sometimes referred to in the media as ‘amnesties’, campaigns are not an opportunity to avoid, evade or pay less tax as the term amnesty suggests, but an opportunity to pay a lower penalty on any additional tax resulting from a disclosure.
During an enquiry or other compliance check, the penalty chargeable is based on the behaviour of the entity involved (the individual or business), the quality of the disclosure, and whether the disclosure is completely unprompted or prompted by HMRC action. The maximum penalty chargeable under these conditions can be up to 100% of the additional tax; so in simple terms, if £10,000 is owed in tax, HMRC can charge a £10,000 penalty.
During campaigns, however, HMRC encourages disclosures by offering beneficial penalty terms. The terms can vary between different campaigns, but are typically much lower than would be charged under more common HMRC activity.
Campaigns are trailed with press releases and are widely publicised in the media. Adverts are taken out in publications relating to the group of individuals, traders or professionals selected; letters are issued and even texts are sent to people that HMRC believes may need to be aware of the disclosure opportunity.
The disclosure opportunity usually takes the form of two stages.
The first stage involves a notification period where the
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