Unregistered Self employment while employed

by **Unknown** on Tue Feb 22, 2011 8:32 pm

Hello. My bf is in a similar situation. He has been earning a small amount of money from a side business while being employed. He did not register as self employed even though he started it approx 2.5 years ago. He earns 20k in his full time job and made 700 pounds in the last two years from his side business.
He is going to register as self employed now. How much penalties/fines is he facing?
In case he would tell HMRC he started his self employment withing the past 3 months- would HRMC be able to check it and would they do it?

by **Catherine Scott** on Wed Feb 23, 2011 7:33 am

A good starting point would be to look at

http://www.hmrc.gov.uk/undeclaredincome/gettingstarted/tax-affairs.htm#6

HMRC will take a view on penalties, but these will always be lower if you go to them, rather than them finding you - As long as you you tell them everything when you do.

Is the £700 the money your b/f has received, or the profit he has made (ie after costs ?) It could be that there is very little tax due.

That said, just because your b/f has made some money does not neccessarily mean he has been carrying on a business that HMRC needs to be told about - could you give us some more information (ie what your bf does, how many sales he has made, how he charges people etc) ?

by **Unknown** on Wed Feb 23, 2011 10:15 pm

Thank you for reply, Catherine.

My bf has earn 700 pounds profit for the last 2 years. He was creating websites and getting paid for it.

We had a look at the penalty information in the link provided. To me it is unclear what penalties you get for registering self emloyment late.

What do all those percentages mean? Will my bf have to pay a full amount of taxes owned + a certain percentage of those tax (depending on individual situation) as a penalty? Is this it? Will HMRC issue 100 pounds penalty for registering self assessment late as well as 100 pounds for each late self assessment submition?

Thank you.

by **Catherine Scott** on Thu Feb 24, 2011 7:27 am

The amount of penalty will depend on when any tax would have been due. To work this out, it will depend when your b/f started the business - do you know when he made his first sale ?