I've been an idiot and not paid my tax - help!

si_the_clown

Hi, I need some advice! I left the army (where obviously the pay office sorted all your tax out) a year and a half ago and since then have been working cash in hand. I know that I have been foolish but I want to get this paid before the HMRC come looking for me! What is my best course of action and does anyone know how much I am likely to be fined?

G-G_4

Has someone found you out as such?

Maybe from now on you need to keep a record of what you earn..

If it were me, and this is not advice, but I wouldn't shout to the HMRC about not paying tax etc.. I would just start a fresh from now.

Sorry if that's bad advice, but this is what I would do in that situation..

Best of luck..

si_the_clown

No nobody has tracked me down, a few of my friends suggest that I may have fallen off the radar, but the people I've been working for were giving me a blank cheque which more often or not I put in my bank account, so there is a trace there if they look into it

System

What you can do, if you think HMRC are on your trail, is declare that you have been self employed. Besides you don't know how your employer has accounted for your wages on their tax returns.

You will have a fine of £100 for failing to disclose this within 3 months of becoming self employed but as you started in the 2006-2007 tax year you still have until 31 January 2008 to file a tax return declaring all your income and expenses without incurring a further fine.

It should be simple to work out your income from the cheques you credited to your account. The only other thing you would have to provide is any expenses you incurred and your income from April 2006 until your date of leaving the army. This would be on the P45 they would have given you when you left.

If you chose not to declare that you have been self employed then the next time you become an employee through PAYE the tax office will ask you to account for what you have been living on between leaving the army and starting employment. In that instance if you declare that you were self employed there would be further fines and interest charges for failing to notify HMRC.

elaine373

I agree with Pam above. In my opinion, you should declare it because its not worth the hassle and worry. This could come back on you and the consequences would be a terrible worry for you. At least now you can still delare and pay your tax. Nothing is worth not being able to sleep at night .Come clean while you can.

PasturesNew

What dates are we talking?
A self-assessment for April 2006-2007 is due 31 January 2008. So you might still have time to get the forms and do it with no fine.

chuckles1066

si_the_clown wrote: »

Hi, I need some advice! I left the army (where obviously the pay office sorted all your tax out) a year and a half ago and since then have been working cash in hand. I know that I have been foolish but I want to get this paid before the HMRC come looking for me! What is my best course of action and does anyone know how much I am likely to be fined?

You meant "how long will I spend in prison?", didn't you?

18 months tax evasion = around 3 years............a year off for good behaviour so 2 years.

amf

chuckles1066 wrote: »

You meant "how long will I spend in prison?", didn't you?

18 months tax evasion = around 3 years............a year off for good behaviour so 2 years.

1. Where is the evidence of tax evasion? I'll give you a clue.....the correct answer is "none".
2. What percentage of those who have unpaid tax through some fault on their part go to prison? Correct answer is below one tenth of one percent....HMRC prefers to negotiate settlements rather than send people to prison.

Pam 17 has given good advice, but I would add that the answer depends on whether you were/are an employee or self employed. If employed, your employer is responsible for any under deductions of tax/NIC. If self employed, you still have time to get your Return in, with minimal financial consequences as regards paying interest or penalties to HMRC.

red_bertie

Can't give u any advice on the tax situation - others on this site will be far more knowledgeable. However, I would urge you to get your NI contributions sorted a.s.a.p. They affect sick benefit and all sorts of other benefits that you could need when you reach retirement.

RB

chuckles1066

amf wrote: »

1. Where is the evidence of tax evasion? I'll give you a clue.....the correct answer is "none".

Well I thought the bit where he said "I left the army (where obviously the pay office sorted all your tax out) a year and a half ago and since then have been working cash in hand. I know that I have been foolish"

amf wrote: »

2. What percentage of those who have unpaid tax through some fault on their part go to prison? Correct answer is below one tenth of one percent....HMRC prefers to negotiate settlements rather than send people to prison.

I hope for the OP's sake you're right................but you're not, HMRC don't like being made monkeys of.

Hoddie_2

No chance of prison. None at all, particularly if the OP volunteers the fact that he's had untaxed income for 18 months. Only if he does nothing and they catch up with him years down the line would there be the remotest chance of there being a custodial sentance.

As amf has said, the action required depends on whether HMRC would view you as an employee or self-employed. I would put all facts in writing to the local HMRC office, say you're willing to pay any/all tax due on the income, but that 'having looked into it recently' you suspect the employer should have been deducting tax at source. This will, naturally, result in HMRC taking your employer to task (assuming they judge you are/were an employee), but this will be the best outcome for yourself.