I wish to ensure that my tax affairs are in order as I am concerned that I could be liable to penalties under the new campaign recently launched by HMRC which targets Company Directors. If all my earnings are taxed at source am I required to file a tax return every year? If my affairs aren't up to date how will HMRC be aware of this, under the new campaign?
IF YOU are a higher rate tax payer, a company director or have more complicated tax affairs you may need to complete a tax return. HMRC has launched several campaigns over the last year aimed at targeting suspected tax evasion among specific groups and sectors. The latest campaign, which was announced during September, targets company directors. HMRC have already started writing to company directors asking them to provide details of any full time or part-time employments they have held since April 2006 and also particulars of self-employment income. HMRC are also requesting details of any company directorships held, company registration details and dividends taken as well as any other sources of taxable income. This initiative is further evidence of HMRC's crackdown on those who haven't met their tax obligations. HMRC are cross checking information held at Companies House which lists all company directors with their own records. Directors who have not notified HMRC of their requirement to file a tax return are likely to face onerous penalties. If you believe that you are due to file a tax return for the tax year 2012/2013 you have until January 31 2014 to complete your tax return and file it online. If you prefer to submit your tax return by post your deadline is October 31 2013. If you have outstanding returns for earlier years you are advised to contact HMRC as soon as possible. HMRC are continuously reviewing information that they receive from a variety of sources in relation to both Companies and Individuals who may for one reason or another have tax irregularities. If HMRC discover that there are tax irregularities in an individual's tax affairs they can impose extremely high penalties, the maximum being 100 per cent of the tax lost. In cases where the taxpayer is proactive and approaches HMRC regarding possible irregularities in their tax affairs, the final settlement could be greatly reduced. For example, a lower penalty can often be negotiated and possibly a reduction in interest charges. It is always advisable to contact HMRC if you believe that you may have outstanding tax returns or tax liabilities before they come knocking on your door. ? Janette Burns (j.burns@fpmca.com) is tax partner at FPM Chartered Accountants (www.fpmca.com). The advice in this column is specific to the facts surrounding the question posed. Neither The Irish News nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.