tax and income from hobby

daffodil

Hi
This is follow on from a thread I did on one of the other boards. My daughter has been getting a bit more money each month from her hobby in addition to her work income.
She has been doing this for approx 4 years and has never declared this to the tax man. It amounts to approx £1000 profit per year as income.
If she declares this now - does anyone have any idea about what might happen and how much this would cost her in tax and maybe penalties?
She has now been made redundant and has no other income apart from her hobby.
Many thanks

fengirl_2

On £1000 pa profit with other income from employment she should most certainly have been declaring this income for the past 4 yrs. She will be liable to a penalty not exceeding 100% of the tax due but this would be mitigated based on her level of coperation, the amount of tax due, the length of time she has not declared the income for, etc. There will also be interest to pay on the tax lost.
I would recommend she takes advice from an accountant or tax advisor before she goes to HMRC with this as they can negotiate with HMRC and minimise the penalty

anniecave

has she deducted all expenses relating to this hobby from the figure? I have no idea what it is but it could include cost of materials etc