Freelance didn't pay tax for 5 years.

[Boldpilot2000]

Hi people,

I am haven't paid taxes for the last 5 years while working as a freelancer in the media industry. For the first 3 years I didn't make more than 10000£ for the last two years I made just around the 25k mark. My problem is I haven't had the money to pay up and I am still struggling to get by.

I understand this is not an excuse I just kept postponing it but I am now at a point were I want to come clean. I understand I will need professional help and I will be trying to raise money to pay a good accountant who can help me out.

I was even thinking about walking into HRMC and talk with them about my situation what advise would you give me?

Thank you in advance.

P.S I am not a UK citizen.

[someone]

It's possible you've only made a minor error if you get it sorted now.

N.B. It's much better to tell HMRC than to wait for them to notice and tell you.

For your earlier years, if there is no tax due and HMRC don't ask you to do a tax return then you've done nothing wrong (unless an expert here corrects my understanding)

It will depend on the exact numbers but possibly your profit was below the annual allowance.

For (I assume) the 2016-17 tax year, you should have done your tax return and paid your tax bill by end Jan. You will now be attracting penalties but if you're quick getting this sorted they won't be too much.

For the 2017-18 tax year, you don't have to do your tax return until Jan next year.

N.B. From a cash flow POV, your jan tax bill would have included half of your 2017-18 tax bill too. Very roughly I estimate around 3000 was due.

If you *can't* pay then HMRC will try to agree a payment scheme with you.

If you really cannot pay, and cannot pay an accountant, then I'd write to HMRC saying what your situation is, that you cannot afford an accountant and you want help to put things right. (You could ring them too but I'd want to start with a letter to establish that I told them. I don't trust the phone line to accurately record the call - but might then trigger them to investigate you which would then look like tax evasion)

But first, ring around some accountants, tell them what you've said here and ask how much it would cost for them to help - explain that you have no money (and be honest about what you can afford with them) - if you can afford 200 then tell them that - and don't be surprised if they want paying first.

An accountant is likely to get you a better deal with HMRC than you will get on your own.

I think there may also be NI to pay but it's been 20 years since I was self employed so I doubt my experience is accurate any more.

[someone]

Oh, to add, if you live in London then try ringing accountants further away. This can be sorted without repeated visits to the accountant so no need for them to be local.

My experience (solicitors rather than accountants) is that central london prices are two to four times higher for the same work - a lot of that down to the cost of office space I guess.

OTOH, when you do have complex affairs, the central london firms are often better able to help you. If your business doubles in size every three years then in 30 years time you'll be making 25 million a year - and want lots of help and paying lots of tax - and want a firm that has lots of different experts available.


Finally, if you do have some money available, paying what you can afford now to HMRC will reduce the penalties (but talk to an accountant first) before you know exactly how much you owe.

[GlobalTaxAdviser]

Hi

I think under the Digital Disclosure Service this could minimise the taxes and penalties you have to pay.

Kind Regards

GTA