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02/10/2013
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Direct Selling campaign

If you are involved in direct selling and have not told HM Revenue & Customs (HMRC) about all of your income, you may not be paying the right amount of tax. The Direct Selling campaign provided an opportunity for you to bring your tax up to date. To take advantage of the campaign you needed to send HMRC your disclosure and pay what you owed by 28 February 2013.

If you have missed the deadline, it will still be beneficial for you to tell HMRC. To come forward now and voluntarily disclose please phone the Campaigns Voluntary Disclosure Helpline.

On this page:

Who could use the Direct Selling campaign?

If you are a direct seller, started before 6 April 2011, and have not told HMRC about all your income, you probably won't have paid the right amount of tax. To take advantage of the best possible terms, you must have voluntarily disclosed your income and paid what you owed by 28 February 2013.

If you have missed the deadline, it will still be beneficial for you to tell HMRC as the penalty may be lower than it would be if HMRC comes to you first. To come forward now and voluntarily disclose please phone the Campaigns Voluntary Disclosure Helpline.

If you have only been a direct seller since 6 April 2011 or later, the campaign was not aimed at you. But you must make sure you are aware of your tax obligations and register with HMRC, if this is appropriate.

Contact the Campaigns Voluntary Disclosure Helpline

Find out how and when to register with HMRC

Read about simple record keeping applications for mobile devices

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What is direct selling?

Direct selling is when you sell directly to customers usually door to door or in customers' homes or the workplace. Companies use different terms for the people who sell their products - you may be an 'agent', a 'consultant', a 'representative' or a 'distributor'.

Your selling may involve demonstrating a product in a customers' home, sometimes at a party, or you might sell door to door, using catalogues. You might only sell to your friends and relatives. As a direct seller you will usually take commission on the sales you make.

You may be involved in direct selling as a full time business, to top up your income from another job or to fit around your caring commitments.

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What are your responsibilities as a self-employed direct seller?

As a direct seller you are generally considered to be self-employed. This means that you are responsible for telling HMRC about what you earn and calculating and paying your own tax.

Not everyone in the direct selling industry is self-employed. If you are a direct seller and you are unsure, you could start by checking any contracts, agreements or information sent to you by the company whose products you sell.

You can usually work out if you are self-employed by asking yourself a few simple questions.

If you are a direct seller and you can answer 'yes' to all or most of the following questions, you are probably self-employed:

  • Do you have responsibility for your business?
  • Can you decide how and when you do your work?
  • Are you paid on a commission only basis?
  • Do you risk your own money in setting up and running your business?
  • Do you receive no holiday or sick pay from the company you represent?
  • Can you hire other people to help you or do the work for you?

When you are self-employed you are responsible for telling HMRC about your income and paying tax and National Insurance yourself.

You can be employed and self-employed at the same time, for example working for an employer during the day and working for yourself in the evenings or at weekends.

Watch a video to help you understand your responsibilities as a direct seller (Opens new window)

Read a transcript of the YouTube video (PDF 29K)

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What happens after you have made your disclosure?

When HMRC received your disclosure, they will have sent you an acknowledgment. If you did not receive an acknowledgement please telephone the Campaigns Voluntary Disclosure Helpline.

HMRC will consider your disclosure. If under the terms of a voluntary disclosure it is accepted as complete and accurate, they will send you a letter confirming this. If HMRC cannot accept your disclosure for any reason, they will contact you (or your adviser, if you have one), to let you know.

Contact the Campaigns Voluntary Disclosure Helpline

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Can I claim tax credits?

Tax credits are payments from the Government. Whether you qualify for tax credits depends on your personal circumstances (such as your age, if you work or have children) and your total income. If you are a direct seller, the hours worked in this business together with any other work you do may contribute towards eligibility or current entitlement to tax credits.

Read about tax credits for direct sellers (PDF 312K)

Read about tax credits

Check if you qualify for tax credits - quick questionnaire

Look at the Tax credits calculator to help you decide if you qualify for tax credits

Self-employment income - work it out for your tax credits claim

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More useful links

See how and when to register with HMRC

Read about expenses and allowances for the self-employed (PDF 109K)

Read about tax allowances and reliefs if you're self-employed

Read about record keeping

Read more to help you decide if you're self-employed

Check your employment status using the Employment Status Indicator tool

More information on HMRC campaigns

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