Barristers and vets are expected to be the next professionals to come under scrutiny after Her Majesty’s Revenue and Customs (HMRC) targeted doctors earlier this month.
GPs and consultants, as well as dentists, who have failed to declare additional sources of income are being given the opportunity to voluntarily declare income for a reduced fixed penalty of 10%, reduced from the usual 100% maximum penalty, under the Revenue’s latest ‘amnesty’.
Under new powers that came into force in April, HMRC can force third parties to share information about taxpayers, even where there is no evidence of wrongdoing. Using these rules, HMRC approached health insurers such as Bupa and Sun Life for the names of doctors and dentists who received payments from the insurers for private practice but failed to declare them.
It is believed that HMRC have managed to acquire the details of over 800 consultants.
The taxman is also concerned that doctors may be living in foreign countries such as Spain and claiming travel to Britain to see patients.
Kevin Kinsella Jnr of KinsellaTax said:-
“We’ve seen surgeons and anaesthetists being investigated in recent months.
We are returning to the days when HMRC (HM Inland Revenue at that time) set up ‘Special Offices’ to deal with certain trades and professions.”
HMRC has set up a Barrister Unit at its Euston Tower offices in London to pursue barristers and their clerks, whilst tax advisers have noticed vets in Bristol and the southwest are being increasingly pursued for undeclared private practice income and expenses.
People in the know say that it is widely believed that barristers will be next. It makes perfect sense as barristers, similar to doctors, are in private practice with an opportunity to hide income from the Revenue. There are Harley Street doctors, for example, who it is said put a third of their income into offshore accounts.
Tax collection methods have been growing ever more aggressive. Investigations have jumped 21% to 900 in the latter part of 2009 compared with the first half of the year. This is due to the fact that HMRC have increased the hunt for lost revenue.
Private sector debt collectors have been drafted in to help whilst Revenue inspectors have been accused of breaking HMRC guidelines.