Mark McLaughlin warns that allowing HMRC to estimate income can be costly for taxpayers.
Taxpayers are required to notify HM Revenue and Customs (HMRC) of their liability to tax within certain time limits, such as where the taxpayer first becomes liable to pay tax, or conducts (or intends conducting) a business that needs to be registered with HMRC.
Failure to notify HMRC of chargeability to tax can happen for a variety of reasons, ranging from an innocent oversight to deliberate concealment. Taxpayers who fail to comply with the notification requirement are generally liable to penalties (see below).
Owning up
Hopefully, taxpayers wishing to ‘come clean’ will have retained sufficient records to enable a complete and correct disclosure of their income and allowable expenditure. Failure to do so can be costly.
For example, in Khan v
