Undeclared income since late 2020. What action to take first?

Nojmas

Starting late 2020 during Covid my niece began a small work from home business which is still ongoing. 2020-2021 income around £2000 pa, 2021-2022 £9000, 2022-2023 £19000, 2023-2024 £23000. Up until late 2022 she also worked at the same time as a PAYE employee for somebody else's company earning around £20 000 pa. My niece has no receipts, only bank transfers from clients, no sole trader business set up and not declared the income. She wishes to declare the income and pay the outstanding tax and fines. She is confused about what to do first. How to contact HMRC, would it be through a direct written email to them, through an accountant or should they just go onto the HMRC website, register as a sole trader and have a go at completing the self assessment online forms for the years past, if that's possible? Is it straight forward to do online? Would she be able to estimate her stationary and heating costs and deduct that from her declared income? She is so confused and scared about what to do first that she is stressing and not doing anything. She is in a right state. Any advice we would be very thankful.

RAS

Were the sums you quoted net income, or turn-over?

BrimfulofSascha

She needs to go and book an appointment with an accountant. they won't be able to work out tax due without knowing the exact amounts she earned. An accountant should be able to work through this with her

Nomunnofun1

Nojmas said:

Starting late 2020 during Covid my niece began a small work from home business which is still ongoing. 2020-2021 income around £2000 pa, 2021-2022 £9000, 2022-2023 £19000, 2023-2024 £23000. Up until late 2022 she also worked at the same time as a PAYE employee for somebody else's company earning around £20 000 pa. My niece has no receipts, only bank transfers from clients, no sole trader business set up and not declared the income. She wishes to declare the income and pay the outstanding tax and fines. She is confused about what to do first. How to contact HMRC, would it be through a direct written email to them, through an accountant or should they just go onto the HMRC website, register as a sole trader and have a go at completing the self assessment online forms for the years past, if that's possible? Is it straight forward to do online? Would she be able to estimate her stationary and heating costs and deduct that from her declared income? She is so confused and scared about what to do first that she is stressing and not doing anything. She is in a right state. Any advice we would be very thankful.

Contact an accountant or tax advisor asap. Regardless of any potential liability they will be much better placed to negotiate with HMRC with respect to penalties. Do not DIY! 

More importantly, they will relieve much of the stress. 

Don’t expect this to be rectified quickly though - the process can be very slow! 

As I said - don’t delay!

Nojmas

Turn over. Thanks

Nojmas

BrimfulofSascha said:

She needs to go and book an appointment with an accountant. they won't be able to work out tax due without knowing the exact amounts she earned. An accountant should be able to work through this with her

Ok thanks, so an accountant will deal with everything including making first contact? I read somewhere you should first personally contact HMRC letting them know that an accountant is preparing her declaration of income? 

Nojmas

RAS said:

Were the sums you quoted net income, or turn-over?

Turn-over.

Nojmas

Nomunnofun1 said:

Nojmas said:

Starting late 2020 during Covid my niece began a small work from home business which is still ongoing. 2020-2021 income around £2000 pa, 2021-2022 £9000, 2022-2023 £19000, 2023-2024 £23000. Up until late 2022 she also worked at the same time as a PAYE employee for somebody else's company earning around £20 000 pa. My niece has no receipts, only bank transfers from clients, no sole trader business set up and not declared the income. She wishes to declare the income and pay the outstanding tax and fines. She is confused about what to do first. How to contact HMRC, would it be through a direct written email to them, through an accountant or should they just go onto the HMRC website, register as a sole trader and have a go at completing the self assessment online forms for the years past, if that's possible? Is it straight forward to do online? Would she be able to estimate her stationary and heating costs and deduct that from her declared income? She is so confused and scared about what to do first that she is stressing and not doing anything. She is in a right state. Any advice we would be very thankful.

Contact an accountant or tax advisor asap. Regardless of any potential liability they will be much better placed to negotiate with HMRC with respect to penalties. Do not DIY! 

More importantly, they will relieve much of the stress. 

Don’t expect this to be rectified quickly though - the process can be very slow! 

As I said - don’t delay!

Thank you so much