Most people in full time employment earn more than the personal allowance (£11,000 at the time of writing), that means that any other income they have such as:
• fees from consultancy or other services such as public speaking or providing training;
• payment for organising parties and events or providing entertainment;
• Income from activities such as taxi driving, hairdressing, providing fitness training or landscape gardening;
• Profits from spare time activities such as making and selling craft items;
• Profits from buying and selling goods, for example regular market stalls, boot sales etc;
are taxable, regardless of how little it is.
If you do not have to complete a tax return you should tell HMRC about your additional income by 5th October following the end of the tax year and they will ask you to submit a return.
If you have had income over and above your salary and have not told HMRC about it and they subsequently find out they can demand the tax (plus interest) for up to twenty years and may levy a penalty.
HMRC are currently running a “Second Incomes Campaign” to get people to come forward and bring their tax affairs up to date. By way of “carrot” HRMC say “The Second Incomes Campaign offers the best possible terms available to get your tax affairs in order. You can take advantage of these by notifying your intention to participate and cooperating with HMRC to make a full disclosure and payment.”
Speak to your local AIMS Accountant today and let them advise you on the best course of action to take on this matter – FindYourLocalAccountant