HM Revenue and Customs (HMRC) have launched a disclosure opportunity (Tax Health Plan - THP) for medical professionals who have underpaid tax, following on from the recent offshore income “amnesty”.
HMRC are now using their legal powers to elicit information about payments made to medical professionals by NHS trusts, private hospitals, medical insurers and institutions that pay commission.
Those who come forward and tell HMRC that they have underpaid tax or duties and settle their debts will be offered a penalty of 10% (plus interest at the rates in force from the time the tax should have been paid), whereas those who do not disclose voluntarily will, HMRC say, face penalties (on top of the tax and interest) ranging from 30% up to 100% of the tax owing. If the total unpaid tax is less than £1,000, no penalty will be payable.
If the unpaid tax is linked to an offshore account or asset, the favourable penalty will not be available, because the disclosure should have been made under the recent offshore income opportunity - although HMRC always encourages anyone who thinks that they may have underpaid tax to make a voluntary disclosure, and they do take co-operation into account in determining the level of penalty.
Under the THP, the intention to make a disclosure must be registered with HMRC before 31 March 2010, and full disclosure details, calculations and payment of liabilities must be sent to HMRC by 30 June 2010.
The disclosures must include all undeclared liabilities for the last 20 years – and not just those connected with any undisclosed income from a medical source.
HMRC has advised that this new disclosure opportunity will be the final chance for medical professionals to disclose tax liabilities on preferential terms, and anyone ignoring this opportunity also risks having a formal enquiry opened into their tax affairs, involving a detailed investigation, and an increased risk of criminal prosecution. Any medical professional found guilty of a criminal offence in relation to their tax affairs has a responsibility to inform the General Medical Council.
When the notification period finishes at the end of March, HMRC will begin to review the affairs of those whose payment details they hold, and who have not notified them that they intend to make a disclosure – and will then start compliance checks or full enquiries.
The THP allows the individual to nominate an agent to handle notification and disclose on their behalf – so anyone wishing to make such a disclosure should seek expert advice on how to do it in a way that keeps penalties to a minimum, whilst reducing exposure to further investigation and potential prosecution.
Ensors can support and assist such individuals in their dealings with HMRC, and are experienced in the process of making these disclosures, ensuring that only the correct amount of tax is paid.
For further information or advice on making a disclosure to HMRC call 01223 420721 or 01473 220022, or email ivor.gorman@ensors.co.uk or john.matthews@ensors.co.uk
