Date posted: 8th Mar 2021
We are helping many new client’s declare previously undeclared income to HMRC. Such income could range from overseas income to UK rental income.
We always advise new client’s to come forward and make a voluntary disclosure to HMRC as this will limit the penalties that will be imposed by HMRC. But there is always the odd prospective client that does not want to take our advice and will take their chances with the taxman, much to our frustration. In our view, that is a foolhardy approach and this is because HMRC is continuing to gather information on individual’s within the electronic database, CONNECT, so eventually HMRC will catch up with the individual and take a less lenient approach to penalties.
The CONNECT system has billions of pieces of information on UK taxpayers and is continuing to collate information from:
- Overseas tax authorities.
- Letting agents, property websites, Airbnb, eBay, credit references agencies etc.
- Local councils.
- The Land Registry.
- Companies House.
- Banks and building societies.
- Disgruntled ex-spouses.
It is even believed to be the case that HMRC “scrape” data from social media sites to find keywords or phrases such as luxury holidays, business, second homes etc and will consider whether the person has such income to justify such expenditure.
As Making Tax Digital for Income Tax comes ever nearer, it is likely that HMRC will be keen to gather more data given that there are likely to be four in year submissions of income to HMRC as well as a year end submission.
Given the current economic state of the UK, due to COVID-19, we believe that HMRC will be keen to assess all options to increase tax revenue. It is even rumoured that HMRC are undergoing a serious recruitment drive for future tax inspectors to handle the data that CONNECT pulls together.
It is clear that the time to come forward with details of previously undisclosed income is now. If you need assistance with a disclosure, please contact our tax team at here.