Coming clean with the inland revenue

[steve7]

Need your help
Myself and two of my business partners have been running a business on line since January this year we have made 250k we have not declared any of our income to the inland revenue. We would like to come clean with the inland revenue. will we receive any penalties?

[al_eebee]

If it is only since January then things are not TOO bad.

You will probably each suffer a £100 penalty for failing to notify HMRC re income tax, but so long as you tell them before 5 October there should be no further penalty re IT/NIC as HMRC have time to issue returns to you.

You are in SA so the first tax will be payable by 31 Jan 2007 based on profits for the period to 5 April 2006.

You will need to decide when you will prepare accounts to each year - 31 March / 5 April is the easiest as it save having to apportion profits in the early years and carry overlap relief until the business ceases, but there may well be valid reasons to chose another date.

You will also need to consider VAT registration and whether you should already have registered and been charging, which for an on-line business could be a minefield and I shall leave for others to pick up, but could leave you in an awkward hole.

The important thing for the sums involved is get full advice and notify HMRC as soon as possible.

[Bob Jones]

If you are not already in receipt of self assessment returns then you must notify HMRC by 5 October - if you do so there will be no penalty. Even if you do not notify chargeability by 5 October there will be no penalty provided you pay the tax due in full by 31 January next. This applies to the other partners as well.
If you are already in receipt of self assessment returns you simply include the income on that return. If this is a partnership then a partnership return will need to be completed. Provided you comply with all this there will be no penalty - if you don't then the maximum penalty will be 100% of the tax due - not £100 - 100% of the tax.

[CDavey9501@aol.com]

If you made 250K since Jan then go see a professional. There may be ways of saving future tax.