If your business receives payment by debit or credit card, you may get a letter from HMRC asking you to check it has all been declared on your 2015/16 tax return.
Last month HMRC launched its Card Transaction Programme – a chance for businesses who may not have declared all their sales to get their affairs up to date under the best possible terms. Laws passed in 2013 give HMRC the power to access data from organisations that process credit and debit card transactions for businesses, which is how they are now able to check.
Some businesses (and their accountants) are now getting letters from the HMRC Campaigns and Projects team, giving them 28 days to:
- Check the income on tax returns for 2015/16 is correct
- Go back and look at earlier years if a discrepancy is found
There are then 3 ways to respond:
1. If you have additional income to declare, go to cardtransactions.campaign.gov.uk which explains how to bring your tax affairs up to date in a straightforward way
2. If you have declared everything, call 0300 123 9272 to avoid further unnecessary contact
3. If you need more than 28 days to check your records, call 0300 123 9272 to arrange this.
If you get a letter it is because HMRC suspects you of under-declaring income, so don’t ignore it! It is possible that there will be no penalty to pay, or perhaps up to 20% of the tax due, depending on the circumstances. However failure to declare the underpayment is likely to lead to higher penalties or even a criminal investigation.
Providing you have a 64-8 in place your accountant should also get a copy of the letter, but knowing the vagaries of HMRC and the postal service, don’t rely on this!
For help and advice on this or any issues contact Altus here.