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self employed but not declared yet - please help

I am self -employed for the first time. I believe you should declare this in the first 3 months of becoming self employed. I have been meaning to doing this for nearly two years and still not declared. I keep meaning too, but time keeps passing by and I still havent got round to it. I want to declare but I am too scared now because I know I will get into a lot of trouble and I am scared I will be sent to prison. Up untill becoming self employed in Oct 2006 I have always been on salary and I have always paid my tax and insurance. I am normally a very law abiding person.

badnews Thurs 21/08/08 21:47

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thugulike
Fri 22/08/08
11:20

I'm assuming this is not a wind up and will give advice in good faith,

This is not a criminal offence. The longer you leave it the more expensive it will be. Just go to HMRC and ask for assistance. It's not an uncommon occurance

badnews
Fri 22/08/08
19:01

Question Author

Thank you. My tax bill will probably be huge.I hope they do not want all the money straight away!

Tom Braider
Fri 22/08/08
23:21

You will definitely not go to prison. You won't even be prosecuted. But HMRC wil want you to make an honest declaration of your income, and they will want you to pay up. Firstly, Class 2 National Insurance, which will be about £250 a year plus a late notification penalty of (I think) £150. The tax and, if necessary, Class 4 National Insurance can't be worked out until you've done a tax return. They will ask you to pay the whole amount you owe right away but if you haven't got it you should pay as much as you possibly can and ask for time to pay the rest. HMRC aren't particularly keen on this and will want to know that you've done everything you can to get the money you owe but they do know that you can't get money from thin air and it's usually possible to come to some arrangement.

I'd see an accountant if I were you, even though it may seem like spending money you haven't got. What you spend will probably be a good investment.

As thugulike says, this happens a lot and in some ways it's no big deal. But there's no getting away from the fact that for 2 years you haven't been paying your way and it's time to settle the bill that others have been paying while you haven't.

Whatever you do, don't let the bill get bigger by doing nothing - they'll find you eventually!

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