How does the doctors’ amnesty work?
HM Revenue and Customs (HMRC) is using its legal powers to attain information from various sources, including NHS trusts, private hospitals and medical insurers.
There is absolutely nothing wrong with receiving payments for private services as long as you declare them lawfully and pay any taxes due that may arise from additional income.
The Tax Health Plan (THP) is an opportunity for medical professionals with undisclosed tax liabilities to come forward and settle their affairs with HMRC at a reduced penalty rate.
Doctors have just two months to notify HMRC if they wish to make a disclosure of any unpaid tax that is due.
A reduced fixed penalty of 10% is on offer to those medical professionals who make ‘full and accurate’ disclosures. Normally a penalty of 100% can be applied.
HMRC have also stated that if any medical professional has an unpaid tax liability of less than £1,000 then they will NOT be subject to a penalty.
The medical profession is the first of many that is under the spotlights for failing to declare fees. For example, doctors may be paid ‘ash cash’ which is a fee paid for providing a medical certificate before a cremation, usually worth around £70.
Doctors may also be in trouble for claiming expenses for the use of the homes as an office when they have also been claiming expenses for the cost of travel from their homes to the hospital or practice rooms.
HMRC have stated that medical practitioners may NOT claim their home as a place of business unless they see their patients there.
If any medical practitioners declare income whcih has been earned outside of the UK that should have been declared in the previous amnesty, they will not be eligible for the reduced 10% penalty rate.
The deadline for notifying HMRC of an intention to disclose additional income is 31st March 2010 and full disclosures must be made by 30th June 2010.
What to do if an inspector calls?
Call KinsellaTax on 0800 471 4546.
It is doubtful that HMRC will tell you what they are targeting so we urge taxpayers to start by asking what you have done wrong.
“You have the right to challenge any area of contention – the inspector is not always right”.
In 2009, a legislative ban was introduced on inspecting purely private dwellings without consent. HMRC are required to give at least seven days’ notice prior to a visit, unless an unannounced visit is ‘necessary’, or a shorter period was agreed.
Unannounced visits must be approved beforehand by a specially trained Revenue officer or with approval from a Tribunal.
However, you must remember that the onus is on the individual taxpayer to prove to HMRC that the income is either tax-exempt or that it has been lawfully declared.
You can appeal to against any HMRC order to the Independent Appeal Commissioners within 30 days.
If you are being investigated and you would like to view all documents held on you, as is your right, then call the HMRC Data Protection Unit on 0191 225 7575.
What can you do in advance?
The most important thing to do to help yourself in a tax investigation is to keep accurate records. This will make an inspection less painful and make it easier for KinsellaTax to handle the case for you.
Call KinsellaTax for more information on 0800 471 4546
Didn’t take advantage of HMRC’s medical tax amnesty?
In January 2010, HMRC announced the launch of a new tax amnesty aimed at medical professionals known as the ‘Tax Health Plan’.
The medical tax amnesty, aimed at any medical professional who is a member of the General Medical Council, was initiated due to HMRC’s concern that…
“… some medical professionals may be understating the amount of earnings upon which UK tax and duties is due.”
Under the terms of the ‘Tax Health Plan’ medical professionals had until 31st March 2010 to notify HMRC of their intention to make a voluntary disclosure to HMRC and until 30th June 2010 to submit their disclosures and pay any outstanding tax along with interest and a reduced fixed penalty of 10%.
Although the ‘Tax Health Plan’ deadline was extended to 1st September 2010, time is officially now up!
The time has now come for HMRC to open an investigation into medical professionals they believe have understated their income and did not come forward in the medical amnesty aimed at them.
HMRC claim to have information regarding earnings from various sources including NHS trusts, private hospitals and medical insurers.
If you are a medical professional who did not take advantage and are now panicking that it is only a matter of time before that dreaded letter lands on your front doorstep.
The time to take action is NOW.
If HMRC find out that you have failed to take advantage of the ‘Tax Health Plan’ and declare additional income you could be subject to an investigation and a maximum HMRC tax penalty of 200%, which is unlikely to be less than 30%.
However, KinsellaTax’s specialists spend their days fighting for fair and reasonable investigation penalties for all of our clients.
We will battle with HMRC on your behalf to ensure you are treated fairly.
If you didn’t take advantage of the ‘Tax Health Plan’ and have received a letter from HMRC informing you of their intentions to open an investigation into your affairs then don’t bury your head in the sand any longer.
One simple phone call to experts at KinsellaTax is all it takes to put your mind at ease.
Our dedicated and non-judgemental experts are here for you 24 hours a day to take the stress and worry off your shoulders.
Our experts know how to battle with HMRC… why use anyone else?
If you didn’t take advantage of HMRC’s Tax Health Plan then get professional help from a specialist on 0800 471 4546.
What happens if you think you have made an innocent error?
Even if you think the loss of taxes and duties is a result of an innocent error, for example if you think your bank advised you of the wrong interest received, you can still make use of the THP.
If this is the case then you may not be subject to a penalty, even at the lower fixed rate of 10%.
You should contact KinsellaTax for advice if you think that the loss of tax is down to an innocent error.
If HMRC accept that innocent error was to blame, they will confirm that no penalty is due and confirm that you can restrict the amount you pay to tax and interest to a maximum of the last six years.
If you think you may have made an innocent error then call KinsellaTax for more information.
What about other professions?
The amnesty has been criticised for giving medical practitioners a ‘cheap option’ whereas other professions face a higher penalty.
The Institute of Chartered Accountants in Scotland claim that fish and chip owners had been unfairly targeted by HMRC whilst doctors have been given an ‘easy ride’.
However, the Revenue leapt to their own defence by claiming that an amnesty, such as this one, is a more cost-efficient way of collecting unpaid tax than opening thousands of enquiries.
For more information call KinsellaTax NOW on 0800 471 4546
What happens if you don’t declare liabilities?
After the deadline of 31st March 2010, HMRC will review the affairs of taxpayers whose payment details they hold and who have not informed HMRC of their intention to make a disclosure.
HMRC will identify those taxpayers by:-
- Comparing information they already hold with taxpayers’ UK tax histories
- Continue to use powers to obtain detailed information about additional payments made
- Contacting customers and undertaking compliance checks or enquiries to resolve matters.
If HMRC find that any taxpayer has additional taxes due, and have not advised them of their plan to disclose them, they will seek higher penalties than the 10% available under the THP.
Those penalties could be up to 100% of the additional tax due and are unlikely to be less than 30%.
If a disclosure made under the THP is incomplete or inaccurate then HMRC will consider the initiation of a criminal investigation.
Call KinsellaTax NOW on 0800 471 4546 for help and advice.
Are any disclosures unlikely to be settled through the Tax Health Plan?
Certain disclosures are unlikely to be settled through this amnesty and are as follows:-
- Disclosures found to be materially incorrect or incomplete when checked by HMRC for accuracy and completeness
- Disclosures from taxpayers where HMRC have already opened an enquiry into their tax affairs before the launch of the THP. Any taxpayer who wishes to disclose liabilities should inform their adviser or HMRC officer conducting the enquiry as an early disclosure will influence the amount of penalty.
- Disclosures where HMRC believe the disclosed money is the proceeds of Serious Organised Crime.
Any taxpayer who feels their disclosure will not be settled through the Tax Health Plan needs professional representation.
Call KinsellaTax on 0800 471 4546 for tax advisers in London, Manchester and Birmingham.
How does this relate to the offshore amnesty?
HMRC forced banks and building societies to hand over information about UK taxpayers with potential undeclared income in bank accounts outside the UK.
Other third-party companies are now also obliged to disclose such details.
The initial amnesty; the offshore disclosure facility (ODF) ran from April 2007 to June 2007 and, as a result of this opportunity, around 40,000 UK taxpayers volunteered information raising £400 million in tax. See more…
A second amnesty; the new disclosure facility (NDF) ran from September 2009 to January 2010. It is believed that only about 13,000 people are thought to have come forward during this amnesty.