Tell HM Revenue and Customs (HMRC) as soon as possible if you have made money you need to pay tax on and have not told them about it.
This could have happened because you:
- did not realise you needed to tell HMRC about it
- were not sure how to declare it
- did not declare it because you could not pay the tax
If you contact HMRC first, they may consider your case more favourably.
You do not need to tell HMRC about income you have already paid tax on, for example wages. But if you do not think enough tax has been taken on your employment or workplace pension, you should tell HMRC.
You should tell HMRC if you earned other taxable income and have not declared it in a Self Assessment tax return. This could include income from:
- renting out property
- capital gains, for example from selling property, valuable items or shares
- working for yourself, including if you buy or sell items regularly, for example at car boot sales or on the internet (you’ll also need to register as self-employed)
If this income takes you over your Personal Allowance, you’ll pay tax on it.
Declare the Income on a Tax Return
If you are already registered for Self Assessment but have not declared all your income, you can make a change to your return.
If you do not usually send a tax return, you can register for Self Assessment to declare any income you have not paid tax on from the last 4 years. You’ll need to fill in a separate tax return for each year.
You’ll get a letter telling you what to do next after you’ve registered.
You must register for:
- Corporation Tax if you run a limited company
- VAT if your taxable annual business turnover is more than £81,000
- PAYE for employers if you employ people
You can contact HMRC if you have questions about undeclared income for Corporation Tax, VAT or PAYE.
If you are a resident in the UK, you may need to report foreign income in a Self Assessment tax return.
If you do not report this, you may have to pay both:
- the undeclared tax
- a penalty worth up to double the tax you owe
You can be prosecuted if you give false information about the tax you owe. If you tell HMRC as soon as you can, they may consider your case more favourably.
You may be eligible to tell HMRC about undeclared income through an ‘offshore disclosure facility’ if:
- you have not told them about your foreign income
- you are not paying the right amount of tax
- you have previously made an incorrect claim
- you are behind with your tax
If you are not eligible to use an offshore disclosure facility, but still have tax to declare, contact HMRC’s Offshore Co-ordination Unit.
- Telephone: 03000 530 310, Monday to Friday, 9am to 4pm