Press Release

11 January 2010

Tax amnesty’ for medical profession launched by HM Revenue & Customs 

 

  • Other professions likely to get their own tax amnesties

 

A ‘tax amnesty’ targeted at the medical profession to encourage consultants and other medical professionals to disclose unpaid tax liabilities to HM Revenue & Customs (HMRC) was launched today ( 11 January 2010), according to McGrigors, the leading commercial law firm and tax investigation specialists.

 

HMRC is concerned that ‘…some medical professionals may be understating the amount of earnings upon which UK tax and duties is due.’ This is likely to include professionals who have not declared some or all of their earnings from private consultancy work.

 

McGrigors understand that HMRC has already held discussions with the General Medical Council and other professional bodies to warn them of the impending ‘tax amnesty’.

 

Under the terms of the ‘amnesty’, which will officially be called the ‘Tax Health’ plan, taxpayers will be required to pay the tax due on income and gains on their unpaid tax liabilities as well as interest and, in most cases, a fixed 10% penalty.

 

Phil Berwick, Director of Tax Investigations at McGrigors, comments: “HMRC often targets its compliance work at specific sectors, but to do so in the form of a tax amnesty aimed solely at the medical profession is without precedent.”

 

“Compliance activity is usually costly and time-consuming for HMRC. By offering an amnesty HMRC is hoping to get a significant amount of tax into the Treasury’s coffers very quickly and at a reduced cost to itself. The parlous state of the public finances and the pressing need to reduce the deficit has probably forced HMRC’s hand to an extent.”

 

The notification period for the tax amnesty will run from 11 January 2010 to 31 March 2010, during which time medical professionals may register their intention to disclose. By 30 June 2010, those who have registered under the process must have submitted their disclosure and made arrangements to pay.

 

McGrigors says that the tax amnesty for the medical profession is likely to be followed by further amnesties aimed at other professions during 2010, and probably beyond. 

 

Jason Collins, Partner at McGrigors, says: “HMRC will be trying to recover unpaid tax wherever it can in order to reduce the Government’s deficit.  Professionals are amongst the taxpayers with the ‘broadest shoulders’ referred to by the Chancellor in his policies on higher taxation, so HMRC will see them as a priority target.” 

 

“No doubt HMRC is sharpening up the powers it has to issue ‘class notices’ against third parties in order to obtain lateral information that points to undeclared tax, as was the case with the notices used against the 300 or so banks for the mainstream tax amnesty. HMRC may be targeting the people that pay the consultants, such as health insurers.”

 

HMRC has made it clear that the Tax Health amnesty will not be a ‘backdoor for those who chose not to use the NDO’. Taxpayers who come forward to disclose income or assets under this amnesty which could have been disclosed under the NDO (New Disclosure Opportunity) are likely to face substantially higher penalties than the 10% on offer.

 

Jason Collins says: “This is something that could catch taxpayers out. A lot of taxpayers are unaware of the NDO and consultants may see this amnesty as an opportunity to disclose income or assets held offshore expecting a 10% penalty. If there is an offshore element, HMRC will say that they could and should have used the NDO and will impose a higher penalty. For any taxpayer with offshore assets, the Liechtenstein Disclosure Facility, with its favourable terms, remains available for those who qualify.”

 

For more informaiton on the THP, please click here
 

Andy Peat

Head of Business Development & Marketing
Telephone: +44 (0)20 7054 2710
Mobile:  +44 (0)7894 835 386
Email: andy.peat@mcgrigors.com

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