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Web Bots Are Out to Get You!
Newsletter issue - July 2011.
The Taxman has announced he is going to start targeting tax evasion by online traders, private tutors, personal trainers and life coaches.
In order to find out who is failing to pay tax on all their income the Taxman is to send out web bots (automatic search programmes), to trawl the internet for data on sales and services advertised by UK residents. This data will then be compared to sources the Tax Office holds such as bank interest and tax returns.
If you declare all of your profits and earnings on your tax return you have nothing to fear. But you may have friends or family members who earn a little bit on the side by selling stuff or advertising their services online, so please pass on this advance warning.
For example, a hobby making decorative items could lead to selling the products at a market or through a website. A common misconception is that if no profit is made the income source does not need to be declared. Unfortunately the Taxman is unlikely to agree. Where the costs are not recorded any income will be treated as profit, and thus will amount to taxable income. The same applies to private tuition; even if the turnover is very small it must be declared where there is intent to make a profit from the activity.
Those online traders or private tutors who have not declared this source of income to the Taxman and who are not registered for self assessment, should contact the Tax Office by 5 October 2011 to notify them there is income received during the 2010/11 tax year. The best way to do this is to complete the self assessment registration form CWF1, either online or in paper form. We can do this for you. The Taxman will then issue the individual with a tax return form to complete for 2010/11.
Where the individual has traded online for several years without declaring the income, a more detailed disclosure to the Tax Office will be required. Please talk to us before approaching the Tax Office, as such a situation needs to be handled very carefully!
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
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