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£140,000 tax

Will HMRC investigate?

Didn't find your answer?

I know all the expenses I can claim already.

Replies (21)

Comments for this post are now closed.

By Rammstein1
04th Dec 2019 12:53

Get an accountant now. You could have already saved some serious money.

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By Accountant A
04th Dec 2019 12:54

Suzi23 wrote:

I will likely make a profit of around $180,000 this tax year (around £140k).

Really? And you don't have an accountant. That's not very sensible, is it? I think HMRC will have a great time with your tax affairs!

Good luck - you'll need it!

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By Suzi23
04th Dec 2019 12:56

I don't need an accountant.
I only earn royalties.
I know all the expenses I can claim already.
Will amount to around £15-20k.

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Replying to Suzi23:
By Accountant A
04th Dec 2019 12:59

Suzi23 wrote:

I don't need an accountant.

If you don't need an accountant then why the **** are you posting on an accountants' website asking questions about your tax?

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04th Dec 2019 13:14

As you say you don't need an accountant, let me take you at your word and say there is therefore no need for us to answer your questions.

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By atleastisoundknowledgable...
04th Dec 2019 13:21

“So will hmrc investigate after I submit my first self assessment tax return online?”

Who knows, but do you want to have to deal with them and the investigation yourself?

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By Chris.Mann
04th Dec 2019 13:29

Regretfully, you appear to be a "member", who offers nothing but, expects everything.
From the tone and content of your posts, so far, you could be an MLR nightmare.
I certainly wouldn't entertain your instructions.

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By SouthCoastAcc
04th Dec 2019 13:46

The number of clients, in a mess that I've met after they have said the same thing.

It amazes me, with that level of income it will be well worth 30mins with an accountant, it will pay for itself many times over.

I see there are multiple posts, surely your time would be better spent on your business? It would remove that worry you have too.

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Replying to SouthCoastAcc:
By Anne Robinson
04th Dec 2019 14:01

Not only on here but on other sites as well - if you don't get the answer you want from one keep asking until you do!

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By SXGuy
04th Dec 2019 13:53

Every post you have made had been one of worry about what may or may not happen so I'm quite suprised you state you don't need an accountant. Accountants don't just add up expenses they do alot more than that.

You clearly have a worry about what hmrc may or may not do yet don't seem to want to pay for the advice you seek so with that I'm out.

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By paul.benny
04th Dec 2019 13:58

I don't quite understand your description of your business. You say that you're selling books online and receive royalties.

If you are the creator or copyright holder, you will receive royalties from the publisher. If you are selling books, you're trading or perhaps you're earning commission selling books on someone else's behalf.

From the facts provided, I think you're selling your own e-books via amazon. I've not seen their T&C to answer definitively, but my first guess is that you will be defined as the publisher (so that amazon can duck claims that might fall on a publisher, such as defamation). In which case your income is probably trading and not royalty income.

Not directly within the scope of your question, but be aware that books, whether printed (zero-rated) or e-books (Standard rated) are in scope for VAT; your profits suggest that you should be VAT registered in the UK. Books sold in other EU member states may result in VAT obligations in those places, which can potentially be satisfied using the VAT MOSS scheme.

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Lone Wolf
By Lone_Wolf
04th Dec 2019 14:00

One of my wife's family didn't need an accountant either.

She knew what came in, knew what went out, and what she could claim. Waste of money we were.

Unfortunately for her, she ran 2 sole trader businesses. She kept the main one just under the VAT registration threshold, the other also earning a healthy amount. What she didn't realise is she had to combine the 2 businesses when determining whether she needed to VAT register.

Lo and behold, she actually breached the VAT threshold a couple of years ago, and is now faced with a very hefty VAT bill, as well as penalties. All in her own name as well, so her personal assets are now at risk.

Her opinion on whether she needs an accountant has now changed funnily enough.

OP, what you know isn't what's going to trip you up. It's what you don't know you don't know, that will. For the amounts at stake, go and see an accountant.

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Red Leader
By Red Leader
04th Dec 2019 14:18

Yes, they will investigate.

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By bernard michael
04th Dec 2019 14:21

In answer to your question
Maybe this year or next year
Possibly neither.
The workings of HMRC are a mystery known only to them

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By bernard michael
04th Dec 2019 14:25

You managed all this in One year ??
Did you start to trade earlier than the year in question. If so what about those expenses - have you claimed them?

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By Bob Loblaw
04th Dec 2019 16:25

Shockingly few people are aware of how the submission process actually works. I've been preoccupied with HMRC's processes and procedures from a very young age and was lucky enough to have distant parents and a weirdly present uncle who supported my passion from the off. I spent my twelfth birthday taking a tour of HMRC's Cumbernauld office and was treated to a first hand display of how it all works.

When the Taxy 5000 receives your online submission, it laser scans the figures and any return that shows a profit in excess of £100,000 is pulled for a manual check. An alarm sounds throughout the Taxy 5000's en suite lounge and kickstarts a series of Wallace & Gromit style mechanisms which wake the nearest available HMRC officer to advise them that you're almost certainly a nailed on dodgepot who is definitely complicit in illegal wrongdoings.

To go into some detail about the Wrong Trouser-ing the office receives: a large metal arm will grasp the officer firmly but tenderly by the genitals in order to rouse them from their slumber. They're then lifted up from their cot by their government mandated suspenders and sent down a 635 foot fireman's pole from the top floor of HMRC HQ to the 'Chamber of Self-Assessment'. The HMRC officer must solve three riddles and fight a griffin to the death before they're granted access to the Taxy 5000's palatial homestead. Once inside they MUST pop the mech suit on charge (it will only charge if you bend the end bit of the Samsung charger slightly to the left, no, no, hold it, you have to bend it and hold it then release it quickly) and make an offering of one yellow Tolley book to the Taxy 5000 before they can check your tax return.

An unfortunate side effect of being an HMRC officer is that once you progress to a certain level, you're contractually obligated to donate your eyeballs to medical science so there's an element of guess work involved in checking over your figures. It doesn't really matter because the outcome is also the same. You're going to be ground down into a crude pate and served at Jonathan Thompson's next dinner party.

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Replying to Bob Loblaw:
Lisa Thomas
By Insolvency Practitioner
05th Dec 2019 09:20

I am reminded why 'lol' became a common acronym!

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By vinylnobbynobbs
04th Dec 2019 16:31

You may have to submit a tax return to the IRS as well

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By Joe Alderson
04th Dec 2019 17:18

Suzi23, I think this may be useful for you. If a person tries to defraud HMRC, HMRC have up to 20 years to catch them, that's 20 years of worrying if HMRC will find out or not. In plenty of cases they do eventually find out and not only will that person end up having to pay the tax they originally tied to get away with, they will have to pay a penalty which is probably going double the amount they owe and then they will have to pay interest on top of it all too.

In addition, they will probably want to get professional help to deal with the investigation which will cost them a lot more than paying an accountant to help them to do things correctly and legally in the first place.

In contrast, if HMRC launch an investigation into a persons tax affairs where no error has occurred, that person would no doubt benefit from having had an accountant who could guide them through the process. Someone who is used to dealing with HMRC investigations would be able to resolve an investigation where no mistakes have occurred. However some investigations do cover things that fall in a grey area where is can be quite complicated to determine who is actually correct, the tax payer or HMRC.

In either case, professional help is a godsend and having an accountant from the off is more than worth it. Loads of people agree after not having one has cost them thousands of £'s they otherwise wouldn't have had to pay.

Judging from your questions on this site I could recommend little more than for you to get an accountant. You have questions, you don't know what HMRC can and can't do, you are probably not fully aware of the complexities of your circumstances and you probably wouldn't have a clue in hell how to handle an investigation should you find yourself in the middle of one, which it sounds like the chances are high you will at some point.

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By Richard Grant
05th Dec 2019 08:15

Do you have a US accountant? What are the tax implications on the other side of the pond? (I assume that's where you royalties come from). If so what about double taxation?
It could get expensive and messy before HMRC start to play as well.

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Maddy Christopher
By Maddy Christopher
05th Dec 2019 10:37

Thank you for all your comments,

This thread has now run its course and has been closed.

AWeb mod team.

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