Business Tax, HMRC, Personal tax, Taxation

Clock is ticking on HMRC’s direct line for direct sellers

By RJP LLP

Time is running out very quickly for self-employed people who sell directly to customers and who haven’t paid all the tax they owe. They have just two weeks left to voluntarily come forward to HMRC and pay their dues. This time limited Amnesty will expire on February 28^th 2013, so if you think you might owe unpaid taxes, you should act quickly to avoid penalties.

Direct selling is becoming more commonplace as people have launched ecommerce businesses either to supplement their incomes or as a single source of revenue. It is defined by HMRC as any trading activity that involves selling directly to customers or taking commission on sales without the need for a shop. In addition, it includes businesses that generate their sales by giving product demonstrations at people’s homes or through parties and coffee mornings.

Direct sellers who rely on their business operations for their entire income are more likely to be submitting self assessment tax returns and to be up to date with HMRC already. However the situation is more complex for those taxpayers who have employment and pay tax through PAYE, but supplement their income with direct selling. In these situations, HMRC may be aware that some additional tax is due from these individuals, which the taxpayer may have overlooked or not realised was an issue.

As with all of HMRC’s amnesties, anyone who comes forward will be eligible for a reduced penalty and no legal action will be taken against them, provided they pay any outstanding amounts before the end of this month. If you miss the February 28 deadline and owe HMRC unpaid taxes, there is a good chance you will be receiving a letter outlining any penalties to be paid and the tax and interest HMRC believes is due to them.

If you are concerned about this situation and think you may owe HMRC for extra tax because of any direct selling initiatives you may have undertaken, you should contact them as soon as possible, and certainly before the deadline. For further advice please contact Lesley Stalker by emailing las@rjp.co.uk.

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