informing HMRC self-employment

lorraine

Hi All

I hope you can help me. I have a client who has asked me, as they have been self employed for just over a year now what are the penalties/implications they will face when informing HMRC.

I realise that this is way overdue and that the client should have informed HMRC within 3 months but I am unsure of the penalties etc to tell the client.

Hope someone can help plleeeassseee!!!!

BIG WAL

I had exactly the same situation. The client became self employed in April 07, but only notified some 6 - 8 months later. He was fined £100 which I appealed due to his difficulties with English, but he still had to pay.

lorraine

Okay, so is it the same fine for over 1 year?

Thank you for your reply....

111beckstar111

lorraine wrote: »

Hi All

I hope you can help me. I have a client who has asked me, as they have been self employed for just over a year now what are the penalties/implications they will face when informing HMRC.

I realise that this is way overdue and that the client should have informed HMRC within 3 months but I am unsure of the penalties etc to tell the client.

Hope someone can help plleeeassseee!!!!

If the client misses the tax deadline for the tax year in which he will be trading, (i.e. 31 January 2008 for trading occuring during 06/07) he will face £100 penalty if not filed on 31 Jan 08 and then another £100 if not filed at july 08. He will also incur interest on tax believed to be owed and surcharges may occur. This will continue until the HMRC receive a self assessment. If he owes no tax he will not face any charges.

lorraine

Okay it looks like a £100.00 fine as she hasn't missed a tax dead line as such, she is just late in informing that her self employment has started. Thank you for your replies.

BIG WAL

The registration form for self employment states that a delay of 3 or more months MAY result in a £100 penalty. There is nothing about an additional penalty if the delay is more than a year. Presumably it's still only £100 regardless how long one waits before notifying them.

A call to the help line (08459 154515) might provide further details.

Any penalties for late submission of SA Returns are in addition to that for late registration.

steveJ

How would the HMRC find out that you have been trading for more than 3 months. Say if I had been buying and selling for a year, how would they know ?

deanshepherd

They would know because you tell them!

Only one penalty of £100 with regard to late notification, regardless of how late (which is actually related to NIC so if you are below small earnings exception threshold then this can usually be avoided).

The usual £100 penalties apply if Tax Returns are late.

steveJ

Well couldn't you just not mention anything and say that you started trading within the last 3 months ???

Bluewednesday

Because that would be lying and could be found out.

All the REvenue have got to do is inspect and find your invoices dated before you told them you were trading.

This is part of professional standards - you don't tell lies!

BIG WAL

Just one further point. as I asked about this at today's Employer Talk event. As Dean confirms, there is only one late registration penalty, but I was reminded that the liability for Class 2 NI is from date of commencement of Self Employment.

lorraine

thank you for all your replies :-)