Over the previous few weeks we have reported on the budget for 2011. This is because it is such a key piece of information covering all people in the UK. After the initial fall out we are now picking up on areas where the Government will try and raise tax revenue.
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It has become clear that they are looking at tightening regulation on those who self declare their tax liability. The main trades they are initially looking at is tradesman, people such as plumbers, gas fitters and engineers. These people typically work for themselves and they work out their own tax via self assessment.
Now many of us will have heard the term doing a foreigner' which essentially is cash in hand none declared income. This is the type of work that the government is trying to crack down on, they want every penny to be declared and the due tax to be paid.
The revenue has given tradesmen until the 31st of May to declare any liability owed for monies incorrectly not claimed. There is a penalty to pay on any undisclosed amounts but to encourage people to do so this has been set a low band of 10-20%. After the 31st May the HMRC have warned they will start to complete in depth investigations to uncover amounts not declared.
The initial period has been given as the HMRC understand that amounts can be missed when making a self assessment. Not all trades people are hot on the numbers and filling out the forms can be quite difficult. However as with any tax situation there is a severe consequence to non disclosure. If it is found that amounts are not being declared investigation could lead to prosecution.
The Government has been quite critical at the complicated tax system which they have been left with. They have already taken initial steps to strip out layers of regulation which is either contradictory or confusing. Hopefully the HMRC will use this period of financial difficulty to simplify the tax system further.
We are sure that making the system easier and fairer will encourage as many people to pay the full and correct amount year on year. This will help the trades and will raise more revenue for the treasury.
So if you are in the above category and think that you have not paid enough, or you might have missed declaring some income by accident contact the HMRC. You can find all of the contact details on the main HMRC website, and some advice do it quick.
