HMRC warns farmers to declare subsidies on tax returns

BPS claimants are being reminded that their support payments must be declared on their tax returns if they are to avoid possible fines.

HMRC has been writing to some farmers who receive BPS payments, reminding them that the subsidies are taxable and should be declared on their annual Self Assessment tax return.

Carlton Collister, tax consultant at Landtax, who was forwarded a copy of the HMRC letter by a client, said that some farmers might be worried by the letter, but that in most cases business owners knew to include BPS payments on their tax returns.

He advised anyone receiving the letter to check their payments had been included – and, if they had an accountant, to do so with them.

See also: Farmers warned to be alert for BPS fraud

If for any reason the BPS payment was not included, farmers should contact HMRC.

If the BPS value represented a particularly large sum of money, Mr Collister recommended going through a tax adviser who would be able to communicate this to HMRC and minimise the risk of automatic fines.

To amend a tax return, HMRC advises asking your tax consultant to do it. To change it online yourself, go to at www.gov.uk/self-assessment-tax-returns/corrections

Fines for not declaring income are up to 60% of the value of the tax owed, plus interest for late payment of the tax owed.