Recent tax amnesties have included the opportunity to volunteer information about undeclared income before HMRC look to prosecute with the added benefit of lower fixed penalties of 10%.
So far, doctors, dentist and offshore investors have been targeted.
It is believed that due to the success rate of these amnesties, HMRC feel that the offer of a tax amnesty can be given to other groups of workers such as the self-employed.
Although take-up of the Liechtenstein Disclosure Facility was slow at times, the yield produced by the ‘Tax Health Plan’, aimed at doctors and dentists, reinforced HMRC’s confidence in the amnesties.
The positive aspect of a tax amnesty, in HMRC’s eyes, is that it is a relatively effective way of collecting tax with minimal effort on their part.
Individual tax investigations take time and resources meaning that tax amnesties make a great alternative as the threat of a criminal prosecution produce high results.
Self-employed workers may find themselves the next targets of HMRC’s crackdown on evasion of tax for one very simple reason…
Those who pay their taxes by PAYE usually pay the right amount of tax at source but where the collection of tax is dependent on an individual’s integrity to produce correct accounts, there is scope for money to go missing.
Only time will tell but if reports are to be believed, HMRC could be launching their next tax amnesty very soon.
KinsellaTax has not found huge disclosures under the said so called “tax amnesties”.
Discussions within the professional tax advisers’ community confirmed that no huge disclosures had been made.
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