What is direct selling?
Direct selling is when someone sells direct to the customer usually in their own homes or workplace. Typically these people would have the title of agent, distributor, consultant or representative and sell at a pre-arranged 'party' or through a catalogue. Payment is made as a commission on sales made and agents could be full time, part time or just sell to friends and family.
What is the Direct Selling campaign?
HMRC are concerned that many people involved direct selling are not declaring all or any of their income and therefore not paying the correct amount of tax or National Insurance contributions. The Direct Selling campaign has been launched to give this group of people an opportunity to bring their affairs up to date and take advantage of the preferential terms in respect of any penalties.
What are my responsibilities as a direct seller?
As a direct seller you are normally considered to be self-employed which means you are responsible for informing HMRC how much you earn every year calculating your own tax. You will then be responsible for paying this tax on time together with your National Insurance contributions.
Who can use the Direct Selling campaign?
The Direct Selling campaign is aimed at people who started direct selling prior to 6th April 2011 and have not informed HMRC about all their income. To take advantage of the best possible terms regarding any penalties full disclosure and payment of any outstanding tax must be made by 28th February 2013. In the first instance this form must be downloaded and completed - Direct Selling Campaign Disclosure Form
Anyone starting direct selling after 6th April 2011 cannot take part in this campaign but should still ensure their tax and NI contributions are kept up to date, here is a useful link regarding registration with HMRC
How do I work out how much tax and National Insurance contributions I owe?
There are two useful calculators provided by HMRC - Tax, NI and penalty calculators
What happens after I have made my disclosure?
HMRC will consider your disclosure and if they agree that it is complete and accurate they will send you a letter of confirmation.
When do I pay the outstanding tax and NI
Outstanding payments should be made at the same time as you submit your disclosure. If you are unable to pay you should contact the Direct Selling Campaign Helpline
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