The Low Incomes Tax Reform Group (LITRG) is urging those who started working as self-employed in the 2016/17 tax year to ensure, if they haven’t already, that they register for self-assessment with HMRC, as time is running out.
LITRG is concerned that gig workers in particular are at risk of not realising that they need to register because of the irregular and often ‘on demand’ nature of the gig economy.
They may also be unaware that although their level of income might mean that there will be no tax or National Insurance due, HMRC should still be notified as it may still be necessary to complete a tax return.
There are just a couple of weeks left to register for self-assessment with HMRC to meet the 5th October deadline – a failure to notify a new source of income and to complete and submit a tax return when required to do so can lead to financial penalties.
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Call us nowLITRG Chair Anne Fairpo, commented, “Behind the innovative technology and new language surrounding the ‘gig economy’ lies an old-fashioned taxable source of income. If a person’s activity is regular, organised and is done with a view to generating a profit, then this will put them within the realms of self-employment and the UK’s complex self-assessment tax return system.
“There is a real risk of penalties for failure to notify HMRC, which are based on the tax that could potentially be lost as a result of the failure to notify on time. Where the 5 October deadline is missed, a person should still register as soon as they find out they should. As long as a tax return is submitted and any tax due is paid on time (normally by the following 31 January), there will be no potential lost tax revenue and thus no penalty to pay.”
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