Reporting shadow economy activity (tax evasion)
What are the consequences of a person not reporting, or under-reporting, income for tax purposes?
Not reporting, or under-reporting, income for tax purposes amounts to tax evasion. Persons engaged in tax evasion will have to pay:
- their outstanding tax liabilities
- interest on those liabilities.
They also render themselves liable to sanctions such as penalties and, in some instances, criminal prosecution.
Is income from 'nixers' taxable?
Yes. 'Nixers' is the description given to work that is generally not an individual's main source of income.
Are the profits from an unlawful or unknown source or activity taxable?
Yes. Profits that arise wholly or partially from an unlawful source or activity, or that arise from a source or activity that is unknown to Revenue, are fully taxable.
What should you do if you have not declared, or not declared fully, a source of my income?
As stated above, not declaring, or under-declaring, income on your tax returns is 'tax evasion' that render you liable:
- to pay your outstanding tax liabilities plus interest on late payment
- to penalties.
Have you been working on a casual basis in recent years and have not declared your income from that work?
Then, you should regularise your tax affairs now by making a voluntary disclosure to your Revenue Office. Chapter 2 of the Code of Practice for Revenue Compliance Interventions deals with regularising tax and duty defaults.
Next: Are you doing nixers (also known as moonlighting)?