HMRC targets tax-dodging social media influencers in latest campaign

Date:

Share post:


HM Revenue and Customs is targeting tax-dodging social media influencers and online sellers in its latest nudge letter campaign. 

Offshore companies that own UK property and cryptocurrency tax-avoiders have previously been the focus of HMRC’s so-called “nudge letter” campaigns, but now the taxman is setting its sights on social media stars and others it suspects of underpaying or not paying tax.  

HMRC told the Telegraph it will send letters to more than 2,000 people who generate an income from creating content on digital platforms and 3,500 to those who make money from online marketplace sales, asking them to either make a disclosure to HMRC or state they have nothing to report. 

A growing number of individuals now make a living by promoting brands’ products online and selling items on e-commerce platforms. In some cases whether they have a tax liability may not be immediately clear. Some influencers who receive payment in the form of clothes, holidays or beauty products for promoting a brand might not realise they may need to pay tax on these goods and services. 

Online salesmen who make an income from their sales may need to declare their earnings and complete a self assessment tax return if they earn over the annual trading allowance of £1,000. 

They may also owe capital gains tax if they generate a profit worth over £12,300 selling second-hand items. More sellers are likely to get caught out by capital gains tax after the allowance is cut to £6,000 from April this year.  

HMRC sent 18,260 so-called “nudge letters” in relation to offshore tax compliance in the 2021-22 tax year, which enabled it to claw back £29m in tax. 

Nudge letters can be an effective catalyst spurring those who are not paying enough tax – knowingly or not – into correcting their affairs. 

But some tax advisers disagree. Dawn Register, of accountancy firm BDO, said: “Some letters reach individuals who are fully tax compliant, simply because HMRC carries out limited cross-referencing or analysis of tax returns already filed. This ‘scattergun approach’ is justified by HMRC given its limited resources. However, for individuals receiving ‘brown envelopes’ with alarming letters from HMRC it can cause huge concern.”

Noel Mooney, of tax firm RSM, said receiving a nudge letter may be concerning, but said those who received one should consider if the information in it is accurate first.

He added: “If you do have income from such sources, you will then need to consider a number of issues before deciding whether to approach HMRC directly or whether you need to speak to an adviser specialising in tax disclosures. These will include, how long you have been receiving the income, the level of income, whether it is from a UK or an overseas source, if payment was received in forms other than money.”

An HMRC spokesman said: “This is routine activity. We believe our customers want to pay the right amount of tax, so we are taking steps to help people do so. Each year we send out thousands of reminder letters on various areas of tax.” 



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Related articles

Englander Davis is Gearing Up To Continue Their Growth Throughout Australia

PRESS RELEASEPublished January 30, 2023One of Australia’s leading digital marketing firms, is ready to expand its reach...

9 customer retention strategies – tips for small businesses

7. Use analytics and automationAs a small business owner, freelancer or sole-trader, you already have a lot...

SURVIVAL TIPS FOR THE 59 MILLION US FREELANCERS IN 2023

PRESS RELEASEPublished January 30, 2023 America’s 59 million freelancers need to buckle up and assume the ‘brace’ position;...

$250 Main Event ($500,000 GTD) | 2023 888poker XL Winter Series

Players have been duking it out for a couple of weeks trying to earn Day 2 seats...