Worth getting finances in order says accountant
The taxman is planning a crackdown on home workers, particularly those in the direct selling sector.
HMRC is using new technology to identify areas of the economy likely to have a high number of missing tax returns and is also targeting eBay sellers, tradespeople such as plumbers, electricians and roofers, coaches and medics.
But it’s not necessarily bad news for home workers.
It could be the ideal time to take control of the business and Parkstone-based Worth Accountants is urging home workers to get their finances in order before they get a call from the Revenue.
“We have had clients who are employed and self-employed at the same time,” says Steve Worth. “If they are making a loss on their self-employment that can be off-set against their PAYE income, resulting in a repayment of tax.
“By the time you claim for working from home, use of car, computer, phone and other tax deductible items, you may be able to turn a low income into a trading loss for tax purposes.”
But as the direct selling industry is flourishing, Steve warns it is likely that many people new to this are unaware they need to file a tax return to declare their earnings.
HMRC is able to analyse returns covering a range of taxes and to cross-reference these with other information to build a picture of where they have taxpayers with missing returns.
Defaulters are being warned to get their tax affairs in order as penalties will be higher if the Revenue gets to them first.
“We would urge anyone in this position to take advantage of our free, no obligation discussion, before they find themselves talking to a HMRC Inspector,” adds Steve.