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Undeclared income - will i get fined? Prosecuted?
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# 1
stokesy01
Old 17-03-2008, 10:13 AM
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Default Undeclared income - will i get fined? Prosecuted?

Hello. wonder if someone can help. i am just getting round to sorting out tax affairs from 01/02, 02/03 and 03/04. i am owed tax back from 01/02 and 02/03 and also need to declare rental income on a property. Even when adding this into the equation, they still owe me. I also technically earned some money from my husband in 03/04 as his book keeper which i didn't declare. I went abroad and rented my flat out in 2001. i filled in some form about leaving the country but heard nothing more. I also thought agencies were supposed to withold tax. They didn't. When i came back, i had 2 months to prepare my wedding, then help my husband emigrate to the UK. Then 3 months after that i gave birth, moved house and had another baby just over a year after that. So many things happened, I just never got to sort it out and with 2 little kids to look after there always seemed something more pressing to do. I did phone the revenue at some point and they said to put it all down in a letter but i had no idea how to work out tax etc so put it off. It is only now that time is almost up for 01/02 claims that i am sorting it out. I have learnt how to work out the tax and deductions you can make on property income and they owe me.

However, will i get fined and/or prosecuted for tax evasion? :confused: I am not a dodgy person, just maybe guilty of sticking my head in the sand.

advice much appreaciated. especailly anyone who works for revenue and knows what happens. Cheers!!!
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# 2
fengirl
Old 17-03-2008, 2:59 PM
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If you owe tax for past years, HMRC can impose a penalty of up to 100% of the tax lost, but this is reduced taking into account, your co-operation, the amount of the tax, the number of years, etc. In addition, interest is charged on tax paid late.
If, as you state, HMRC owes you, then there cannot be a penalty or interest. However, there is the danger that, yourreturns being so late, they could decide to open a formal investigation which will mean one or all of the late years are looked at in depth before any refund is paid.
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# 3
stokesy01
Old 17-03-2008, 5:48 PM
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cheers for that. Blimey, sounds really scary. maybe better to keep quiet. they owe me about 500 but if I have to pay any fines etc then have investigation - is it worth it? WOuld they do an investigation on me do you reckon? I am only small time suburban housewife. I wasn't self employed, just in different full time and part time work for different periods. what does an investigation entail?

cheers
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chappers
Old 18-03-2008, 12:20 AM
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I wouldn't worry about it.
As the returns are form so long ago they might investigate you but I'm sure it will be a simple investigation involving you providing them the relevant documents to back up the figures on your return.
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fengirl
Old 18-03-2008, 10:07 AM
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As I said above, if you are due a refund, there cannot be a penalty or interest.
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# 6
pinacolada
Old 01-12-2011, 3:35 AM
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Please I need advice and help.

I have been selling softwares for a year, I have earned over 60,000, my buyer transfers payment via bank wire transfer.

This is a unregistered business. I pay my seller cash and he wants no other payment method. I have never asked where he got the products from as it was none of my business.

I am worried that if HMRC flag this I won't be able to provide invoices from my seller. What if he provides a bogus receipt with false name and address, will HMRC investigate further into this? And will I get into trouble?

My buyer always pays via wire transfer and I am surprise the HMRC did not pick this up, will they be sending me a letter?
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# 7
happywarmgun
Old 01-12-2011, 9:53 AM
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Quote:
Originally Posted by pinacolada View Post
Please I need advice and help.


I have been selling softwares for a year, I have earned over 60,000, my buyer transfers payment via bank wire transfer.

This is a unregistered business. I pay my seller cash and he wants no other payment method. I have never asked where he got the products from as it was none of my business.

I am worried that if HMRC flag this I won't be able to provide invoices from my seller. What if he provides a bogus receipt with false name and address, will HMRC investigate further into this? And will I get into trouble?

My buyer always pays via wire transfer and I am surprise the HMRC did not pick this up, will they be sending me a letter?

[apologies if yours is a spoof post and I am a fish biting a worm]


There's a fair bit to unpick there isn't there.

Have I got this right: You sell 'software'. You get the software from someone who you pay in cash. You have no idea if the software is properly licensed or legitimate . You then sell it on to someone who only pays in bank wire transfers (I assume you mean "Western Union' type payments?). So you have one supplier, and one customer. You have made 60,000 profit on the difference between what you pay the seller and what the buyer pays you. You haven't set yourself up as a business (either limited co. or sole trader) nor registered for tax.

Worst case scenario is that the buyer and seller are in cahoots and using you as a 'laundry' for the proceeds of organised crime. You could be party to a criminal conspiracy with devestating legal consequences for yourself if found out.

Next worst case scenario: you are unwittingly(ish) selling unlicensed software. You could find yourself on all sorts of fines for copyright theft (with a financial punishment more likely than a prison visit) in addition to your outstanding tax liability.

Best case scenario: your buyer and seller are legitimate, you simply owe (a lot) tax on your profits. The sooner you register everything the better and the less it will cost you. If you have 60k in profit already it really, really will be worth getting an accountant to help unpick it all. I suspect if you have 60k in profit then you will be over the VAT threshold and that could be the biggest shock of you for all....

What kind of software is it?


It may sound easier to stick your head in the sand given the above but on any of those scenarios if you let it run you are drifting towards very unpleasant sanctions that could ruin you further down the line.

Get an accountant, quickly. Good luck.
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