HMRC's Tax Health Plan deadline for disclosure and payment ends on 30 June 2010

On 11 January 2010 HMRC announced an initiative called the Tax Health Plan (THP) allowing individuals in the medical profession to declare all earnings and settle their arrears of tax for a fixed penalty of only 10%. Under this tax amnesty, individuals were given until 31 March 2010 to notify HMRC of their intention to give disclosure and to provide actual disclosure and payment of tax including penalties and interest by 30 June 2010.

Seema Parikh, Partner and Head of Tax and Asset Recovery at the Firm explains:

“The cost of tax evasion to the Exchequer is greater than £15 billion a year and this is the major driving force for HMRC to recoup lost revenue particularly in this economic climate where government departments are seeking to cut their internal budgets and slash spending. This is part of a series of concerted attempts by HMRC to replenish the Treasury’s coffers. The first line of attack from HMRC saw those with money in off-shore bank accounts being targeted (see related MPR news item on Liechtenstein Disclosure Facility) and now we are seeing the authorities clamping down and targeting the professions and the middle-classes for sources of undeclared income.

THP is a mechanism whereby medical professionals can approach HMRC and settle their arrears of tax without suffering a 100% penalty or criminal prosecution. HMRC have stated that they will not inform the General Medical Council of any individuals who come forward under the amnesty.

HMRC  is obtaining information from NHS Trusts, Insurance Companies and Private Hospitals regarding third party payments made to professionals in the medical sector as this is thought to be an area of undeclared revenue.

HMRC   have warned that after the amnesty of 31 March 2010 ends, they will carry out targeted investigations on medical professionals from the information they have obtained from other sources. This could lead to penalties of 100% and in some cases criminal prosecution. Tax defaulters are also likely to be “named and shamed” by HMRC but this is expected to start in April 2011 and we are waiting to hear from HMRC   if they intend to report individuals to the GMC post the amnesty.

Medical professionals are not the only ones on the target list, it looks as if HMRC are looking to target the legal profession next with barristers in their line of fire.”