Tax Return Initiative: HM Revenue and Customs launch tax amnesty for higher-rate taxpayers to declare hidden income before October 2012.
Self-Assessment Tax Return
Following previous tax amnesty schemes, which have recently targeted health, education and tradesmen sectors and brought in £500m in tax, HMRC are offering middle-class taxpayers a partial tax amnesty if they settle their unpaid tax bills by October this year.
Higher-rate tax payers who take up HMRC’s Tax Amnesty will be offered reduced tax penalties of £200 plus a fine of up to ten percent of the tax owed. The government hopes that HMRC’s latest tax amnesty, dubbed the ‘Tax Return Initiative’, will bring the Revenue millions in unpaid tax.
HMRC has warned that higher-rate taxpayers ignoring the tax amnesty will be faced with ‘aggressive’ tax investigations and criminal prosecutions. UK Taxpayers in the forty or fifty percent tax rate bracket are being written to by Her Majesty’s Revenue and Customs if they have failed to fulfil a request to complete a self-assessment tax return for 2009-2010, or earlier.
HMRC expect that tens of thousands of higher-rate taxpayers will be affected by the Tax Return Initiative Amnesty. Payments can be made to HMRC via their website as of 3 July 2012 until the tax amnesty deadline on 2 October 2012.
But not every-one is in support of HMRC’s Tax Return Initiative with some tax experts claiming that although a good idea in principle that taxpayers’ should be cautious of using the offered tax amnesty. Campaign manager of the TaxPayer’s Alliance, Robert Oxley, believes that if the tax code wasn’t so complicated that HMRC would not have to run such tax amnesties:
“HMRC spends so much time chasing down unpaid tax because of the overly complex and loop-hole ridden tax system it’s trying to administer. Reform of our weighty tax code is needed or these same problems will continue to occur at the end of every financial year. A simpler system would reduce the need for amnesties and ensure that the taxman collects more of what he expects in the first place without having to hunt down revenue months later.”
News of HMRC’s new tax amnesty was released as the Public Accounts Committee is being pressured to investigate tax avoidance by the wealthy. Chairwoman, Margaret Hodge, suggested at the end of June that the National Audit Office had agreed to examine how HMRC deal with tax loopholes; success of the Tax Return Initiative will remain to be seen until after the 2 October deadline.
Would you like to take part in HMRC’s new tax amnesty?
Our team can help submit your voluntary disclosure in HMRC’s Tax Return Initiative by 2 October 2012.