Sisters tax issues

[Heatedfleece]

Hi,

im trying to support my sister as her finances have fallen into a bit of a mess.

we’ve realised that two years ago she under declared about 3k of income and therefore didn’t pay enough tax. This wasn’t intentional and as far as she’s aware this hasn’t been picked up on.

In think she should call and fess up. She thinks that she’ll just ‘get away with it’ and doesn’t want to bring it up now!!

WWYD?

If it's one thing these governments are good at is making people pay their tax... The likely hood is at some point she will get a letter to the post asking her to pay it back.... This will be higher the longer she tries to hide it... So if I where her I'd pay what she owes now while the amount is low...

What would I do.. keep quiet but make sure I have the money to hand.

It's highly unlikely an underpayment thats not been detected so far would be found out unless she does something from this point on to draw attention to herself. HMRC don't have the resources to go around checking small amounts. But if she is found out she could have to pay interest or penalties and if its thought she knew and didn't say anything then she could end up having an investigation into years of her tax records and generally a lot of grief. Tax on £3000 won't be that much compared to peace of mind. So yes I'd ring them and say she has only just discovered the underpayment and can she repay/have a payment plan.

NC for this. I had issues with my tax return a couple of years ago, found out recently and got myself in a right stress over it. Spoke to HMRC and they were lovely - they just said to adjust the return for the relevant period and I could pay the extra. If you go to them and admit you messed up, they are much nicer to deal with than if they come knocking to you.

Two years ago? Honestly just leave it, its unlikely to be picked up now. She should make sure she has money saved aside in case it is.

HMRC won't find it now. They have 12 months from either the date you filed the tax return, or the original filing deadline (whichever is later) to open an enquiry into your tax return.

If they enquired into a later return and found something that she's missed, they can open up the prior year's tax returns again, but they can't now just open an enquiry into a tax return that's outside the window.

Nor can you amend a tax return once you're outside that window without writing to HMRC to explain it. You can't just amend it online.

If she's really that bothered about it, she could put it through her next tax return instead.