HM Revenue & Customs (HMRC) have announced a disclosure opportunity for those with income from tuition and coaching who have not previously told HMRC about the amounts received, and so have not paid the correct tax.
HMRC is using legal powers to obtain information about payments made to tutors and coaches from various sources, including the academic, sport, leisure and other sectors – so will pursue those who they find to have undeclared income and who do not come forward.
If you decide to disclose under the Plan and voluntarily put your affairs in order, HMRC should allow you to pay any tax owing for a maximum of 6 tax years, and reduce the penalty to a maximum of 20%
However, if HMRC subsequently find that someone has failed to disclose under the scheme and have previously understated liabilities, they could suffer penalties of up to 100% of the tax owing – and risk having a detailed formal enquiry or criminal investigation opened into their tax affairs, which could go back as far as 20 years.
HMRC must be notified of the intention to make a disclosure by 6 January 2012, and disclosure calculations and payment of all outstanding liabilities (including interest and the penalty) must be received by HMRC by 31 March 2012. HMRC may allow additional time to pay to those whose circumstances warrant it, but it will be necessary to explain your financial position, and come to a payment agreement with HMRC before submitting the disclosure.
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 have experience in the process of making these disclosures and can support and assist individuals with notifying and making the calculations and disclosure, and also in their dealings with HMRC, ensuring that only the correct amount of tax is paid.
For further information please contact Anne Wright