HMRC seeks out online traders and freelancers over unpaid tax

A host of digital freelancers and traders have been written to by HMRC, urging them to report their income.

Within these letters, HMRC advises that it holds information indicating the individual has received income which has not been disclosed to the tax authority.

The Chartered Institute of Taxation (CIOT) confirmed that HMRC had issued the first batch of warning letters mid-January, with those in question given a 30-day window to file a ‘certificate of tax position’.

It is also worth noting that this new emphasis on reviewing the tax position of individuals creating online content is a joint initiative, conducted across several HMRC departments. CIOT also advised that “members of the Joint Chiefs of Global Tax Enforcement (known as the J5) are looking at undertaking internationally co-ordinated action”.

HMRC advised CIOT that this activity will continue into 2023 and beyond.

HMRC warning to the gig economy

The message from HMRC is clear. If you have undisclosed income relating to online or digital activity, you should take urgent action to bring your tax affairs up to date to mitigate HMRC applying penalties and fines, in addition to recovering any unpaid tax.

If you have undisclosed income from the gig economy, it is possible to submit a Notification of Intent, disclosing your earnings via HMRC’s Digital Disclosure Service (DDS) portal.

Although it’s always best to disclose untaxed income as soon as possible, the CIOT warns that a Notification of Intent may not always be the most suitable course of action.

The body said: “Depending on the individual circumstances of the taxpayer, other approaches may be better, for example Code of Practice 9 where fraud is suspected”.

We can work with you to deal with undisclosed income proactively

A good way to protect against any form of HMRC investigation is to employ an accountant first and foremost. Using an accountant should ensure that your tax return is accurate and complies with the UK tax regime. We can help you identify all allowable expenditure and reliefs that may be available.

Whatever you do, it’s always best to deal with unpaid tax issues head on and don’t ignore them.

At TaxAssist Accountants many years of experience in handling cases like yours, ensuring the best possible outcome for all concerned. For a free initial consultation on your tax affairs, pick up the phone and arrange a meeting today on 01223 455 155 or drop us a line using our online enquiry form.

Last updated: 27th January 2023