HMRC Sent me a Letter re Unregistered Business

TheCyclingProgrammer

comeandgo wrote: »

Would you have any expenses to reduce your profits?

Even if OP has incurred expenses, it sounds very unlikely that they've kept any records to back this up!

Robin9

If you are to continue with the business then get an accountant and a business bank account.

The HMRC will propose a figure - accept it

spadoosh

Im surprised at the recommendations of an accountant if im honest.

What accountant is going to take on a tax investigation case for someone who hasnt paid tax in over 10 years, who has little chance of paying the tax bill which can send them to jail versus the accountants bill which might end up as a bad mark?

If the OP cant pay tax im going to be reluctant to think they can pay an accountant.

I fully appreciate the need for one mind.

Tigsteroonie

kazwookie wrote: »

Just out of interest what did you do with the £30K per year?

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hoping4calm wrote: »

I own my home outright but don’t want to lose this.

haras_nosirrah

Please confirm that on top of not paying tax (in what way is 30k a year a hobby business) you have not been claiming benefits based on a low income? If you have also been claiming tax credits and the such based on your income being 12k a year there may well be more letters coming

Astar1809

haras_nosirrah wrote: »

Please confirm that on top of not paying tax (in what way is 30k a year a hobby business) you have not been claiming benefits based on a low income? If you have also been claiming tax credits and the such based on your income being 12k a year there may well be more letters coming

Didn't even think of this, but its true, any benefits your have been getting will also be reversed. the reality is you are likely going to have to sell the house and start again, but tax compliantly this time.

Pennywise

spadoosh wrote: »

What accountant is going to take on a tax investigation case for someone who hasnt paid tax in over 10 years, who has little chance of paying the tax bill which can send them to jail versus the accountants bill which might end up as a bad mark?

Tax investigation specialists usually want payments up front, so you pay them for x hours work, then when that's spent, you pay them for another x hours etc.

Astar1809

Pennywise wrote: »

Tax investigation specialists usually want payments up front, so you pay them for x hours work, then when that's spent, you pay them for another x hours etc.

Do you think the cost of this will be worth it in this instance? its not like there has been a grey area here and why not allow HRMC all the information they require and let me set the repayment figure? i cant see any value in employing a tax specialist here as there will be very little proof of expenses, or any paper trail, so why not let HRMC do the work for free and reach a settlement.

Pennywise

Astar1809 wrote: »

so why not let HRMC do the work for free and reach a settlement.

Because HMRC won't "do the work", i.e. they will just do enough to justify the determinations they make, which will probably be far higher than the actual profits made. They will typically do the latest year in detail and then simply extrapolate backwards adjusting for inflation, so profits will probably be grossly overstated, especially if the business has been growing over many years. The OP will need to be able to counter/argue the determinations which comes back to someone having to do proper figurework, think about claimable expenses. HMRC will only spend time working through the data to their own advantage - they WILL overstate income and understate expenses/reliefs. You also need someone capable of negotiating the penalties etc which could be as high as the tax due, i.e. doubling up the liability - but with good negotiation could be reduced right down to much smaller amounts.

Robin9

£30k a year at (say) £30 per treatment - aromatherapy or whatever - is a 1000 treatments and that 20 a week - hardly a part time hobby.

Hope you haven't been running this business from home !