Entries from April 2007 ↓

Do you get income from overseas such as holiday home rent or offshore savings interest? If you do, but haven’t declared it to the Taxman, HMRC has offered an amnesty until 22 June 2007. This reduces the penalty to 10% rather than 100% and avoids prosecution although there should be no penalty if the tax at stake is less than £2,500.

New information sharing rules between countries make it much easier for the Taxman to trace you. You should expect the Taxman to hit you hard if he catches anyone after the amnesty period has expired.

The tax, interest and penalties have to be paid by 26 November 2007. It has been estimated that this amnesty could net £5bn for HMRC.

It is also possible to use this amensty to sort out any onshore undeclared income and benefit from the reduced penalties.

International football manager Guus Hiddink has been given a 6 month suspended sentence and £30,000 fine for tax evasion. Hiddink, a one time England manager target, evaded £900,000 in taxes by falsely claiming to be resident in Belgium.

The company Ebay is coming under increasing pressure from both the US and UK governments to release information en masse about its customers who don’t pay tax on the items they sell. Ebay is resisting this pressure at the moment but it is worth remembering that anyone who regularly sells items should declare their income to the Taxman if they are trying to make a profit from the sales.

Exceptions to having to pay tax include when you only sell your items as a hobby (and don’t make a profit) or if you are just selling old household items.

HMRC has won another legal battle meaning that the banks HSBC, HBOS, Bank of Scotland and Lloyds TSB will have to hand over details of clients’ offshore bank accounts. The word is that the Taxman is considering offering an amnesty for tax evaders but will only give them 6 weeks to come clean and a further four months to make a full disclosure and pay the tax owing.

We understand that, under the proposed amnesty, penalties will be capped at 10% of the legal maximum except in the most serious of cases.

Often the Taxman will ask to see personal bank statements when he is in the course of a company tax enquiry. He is trying to identify untaxed receipts on your statements so that he can then try to charge extra tax.

The way around this is to regularly note on your personal bank statements the reason for any one off bankings. For example, remortgages, repayment of loans, gifts, gambling winnings. Obviously, it will also help if you keep some documentary evidence of these receipts.