HMRC Sent me a Letter re Unregistered Business

DigForVictory

You can hope for calm all your username suggests but if you have come to HMRC's attention, they won't go away, they won't quit easily & you may as well get an accountant & start trying to find grounds to negotiate what you owe.

If it all seems massively unfair, that you haven't been well etc? Well, even hobbies for cash need records - and if you can't be bothered, you can expect to be the Awful Warning. There may be some time specific mitigation for ill health but do not count on it.

00ec25

hoping4calm wrote: »

Could they really go back as far as 20 years ago into my records?!

since "you" have openly admitted tax fraud in public yes i very much hope they do label you as "deliberate" evasion and therefore legislation allows them to go back an unlimited period

in what world do you live that £30k income on top of your "real" job is a "hobby". That alone is more than average earnings and you should be penalised accordingly

as HMRC have themselves approached you that means it is a "discovery" investigation, not a "disclosure" investigation and you can expect them to throw the book at you. I strong;ly advise you to spend some of your undeclared money on getting an accountant familiar with defending investigations to act as your go between with HMRC. You are going to need professional help

00ec25

DoctorStrange wrote: »

Not to derail this thread, but is this true? How can HMRC have unrestricted access to personal and business back accounts?.

yes, it is called THE LAW

(Holmes and Knight v HMRC, 2018 TC6824).

MacMickster

OrderfromChaos wrote: »

Finally, you state in your first post that you own your own house. You state that you earn £12k a year from your job. Unless you inherited property or wealth, that can only support a mortgage of, perhaps, £40k? (I’m sure other readers will correct me if I am wrong). If you had saved a deposit of £10k, you might be able to live in a house worth £50k. If you are living somewhere worth two, four, six times as much, HMRC will expect to be told where the money came from to buy it. If it is from your “hobby” income, then they may well take the attitude that you have bought at least a part of your home with their money, and they may want this money back. My strong advice is to be ruthlessly open and transparent when the investigation starts; and try to get ahead of the enquires by offering as much information as you can before it is asked for. This WILL help.

I remember, some years back, an acquaintance tried not co-operating with an HMRC enquiry thinking that if he didn't provide information then they couldn't prove how much he had underpaid and so would get away with it. He lived in a very nice house and I suspect that the tax inspector was interested in how he had been able to afford it.

As a result HMRC issued a legal notice to his lender to get a copy of his mortgage application. This was in the days of self-cert (liar) loans. They then said that they would assume that the income he claimed to have when applying for that mortgage would form the basis of their assessments unless he could prove otherwise.

His accountant suggested that appealing to the courts against such assessments on the basis that he wasn't fiddling his tax by that amount but simply committing mortgage fraud was probably not a great idea. I think that his accountant managed to get some reduction in the amount owed, but he still lost his house.

DoctorStrange

yes, it is called THE LAW

(Holmes and Knight v HMRC, 2018 TC6824).

Being compelled to hand them over is a little different to the suggestion they already have access.

I think it's probably fair to be transparent with them under investigation, but was alarmed at the thought they can have free access without you knowing!

hoping4calm

This is sounding way worse than I thought and seems I'm stuffed.

I should point out that I wasn't always making 30K per year but just last few years, It was way less at the start even allowing for inflation.

I have little in the way of expenses - some clients come to me but some I travel to so perhaps petrol?

I'd love to hear from anyone who managed to pull through this with minimal expenditure.

Could HMRC make me bankrupt? How would this work?

Davy_Jones_II

You don’t seem to get this. Yes, they can make you bankrupt, they can take your car, house, and money, and also send you to jail for a great many years.

You are still looking for ways to evade tax, so I am assuming at this point that you are trolling now.

If what you have said is true, expect to lose every possession you have, and go to jail. If you are trolling, I hope that next term brings some maturity with it.

hoping4calm

I'm going to bite the bullet and work out what I think I owe and hope they accept it.

My house is worth about 300K so they will know I have equity in this. Hopefully I won't lose this.

I know people here are judging me harshly but I truly never realized the extent of things and how serious this is taken by HMRC.

Thanks for the reality check and although hard to hear, it's made me realize I need to be honest with them in hopes they won't punish me too much. I read that you get mitigation for being honest - fingers crossed!

haras_nosirrah

I don't think anyone here is being harsh, just realistic. Not declaring a second income which you have had for 30 years is going to be a lot of tax due especially in light of it now being 30k a year.

HMRC are getting smarter and good thing they are too - how else do we as a country fund expensive cancer treatment like you have just benefited from unless people who earn money pay it into the pot.

An effective 42k after tax income is a gross income of over 60k. With no mortgage to pay you must have a considerable amount of savings on that income.

The time has come to repay what you owe. If you comply and offer what evidence you can then hopefully you will avoid too many penalties. You don't want them assuming you have been earning 30k a year for the last 30 years and base their sums on that

zagubov

It's half-term holiday in many areas right now.