Compliance Letter

Bobby_Bouche

So last week I had a letter from HMRC. It said they were looking at my current tax status.
The other part of the letter said they don't have any tax information for me for the last 6 years.


As you might imagine I am bricking it somewhat!
The letter is asking about income and anything else.

Any advice please?
Thanks.

BoGoF

Thot it would be obvious, fess up. They will have details of your ebay income.

Get an accountant if need be.

dori2o

Advice.....

Be completely honest.

How much profit do you think you've made from Ebay sales?

Did you have any other income in those years?

Being honest and assisting with the investigation is important.

HMRC can and do issue penalties on top of any tax liability due in cases where they have discovered undeclared income. The penalty is calculated as a percentage of the tax due and the percentage is based on how honest/co-operative you have been during the investigation.

Penalties can range from 0% to 100% depending on whether its income you have knowingly refused to declare, an honest error/mistake, or even where you continue to attempt to obstruct the investigation.

Get as much paperwork together as possible over that period and break it down into each tax year.

It's a scary proposition when you get the letter, but if you are honest with the investigating officer and are helpful then they will be very good with you and will help you to put right what's gone wrong.

Keep all your correspondence regarding this together, make notes of any phone calls with HMRC, always phone the number on the letter and not the general helpline. The number on the letter will get you directly through to the officer(s) dealing with your case.

If you think you need professional help then see if you can get a free consult with an accountant, or go directly to one.

Alternatively try Citizens Advice Bureau.

Bobby_Bouche

I made decent money/ profit from the eBay stuff as I did not pay any tax. I never really thought it would make any money in the beginning. Do I really need an accountant for me to give all I have to HMRC?

Jokes aside I am worried sick.

Pennywise

Bobby_Bouche wrote: »

Do i really need an accountant for me to give all I have to HMRC?

A decent accountant will mitigate the damage, i.e. ensure that all appropriate claims for allowances and reliefs are made, check all allowable expenses have been claimed for, and ultimately negotiate a settlement with HMRC to reduce the fines and penalties.

Without an accountant, how are you going to be able to produce accurate tax returns and business accounts to declare the correct profit figures and work out the correct tax liabilities - can you do that yourself? do you have enough knowledge of accounting/tax rules to do it?

HMRC aren't going to do it for you and won't be on your side. If you don't come up with accounts and tax returns, they'll just make up estimated assessments/determinations of the undeclared profits and then take action against you to recover the money they said you owe.

BoGoF

Don't even think about trying to understate your sales.....HMRC already know how much you made as they have access to ebay info.

Bobby_Bouche

I'd not be able to as it's all ebay to bank so all in black and white.
I shall speak to an accountant Monday.

Out of curiosity what i tell an accountant , does it stay with me and them etc?

Pennywise

Bobby_Bouche wrote: »

Out of curiosity what i tell an accountant , does it stay with me and them etc?

No, there isn't the same confidentiality requirement that solicitors have. Accountants are, by law, required to report suspicions of money laundering/proceeds of crime offences unless you're going to make full disclosure. So if you tell the accountant something and refuse to allow them to disclose it to HMRC, they'll almost certainly make a disclosure report - they face severe consequences if they don't.

Bobby_Bouche

I'm going to declare it all and hide nothing.
See what he says. Hope his bill is not eye watering

glider3560

If you have details of your ebay profits, it should be quite easy to work out the tax due.

From that, you can then estimate the penalty (i.e. double the tax due to estimate the worst case).

Bobby_Bouche

Thanks to all for info. Full disclosure it is then!
Ordered bank statements from periods asked for. Accountant primed and ready.
Bankrupt in the next 12-18 months then!