Tax Investigations - Tax Amnesty - Health professionals

You may recently have become aware of a compliance project being conducted by HM Revenue and Customs focusing on the tax affairs of medical health professionals

The project entitled "Tax Health Plan" (THP) begins with immediate effect.

In essence HM Revenue & Customs (HMRC) is offering health professionals with undisclosed tax liabilities the opportunity to come forward and settle their affairs now, whilst taking advantage of a greatly reduced penalty regime.

Those who do not, face the prospect of a formal investigation under a procedure known as civil investigation of fraud.

HMRC have warned that the penalties levied under this procedure are likely to be extremely punitive.

Furthermore, where conduct is deemed to be particularly serious, HMRC reserve the right to pursue a criminal prosecution.

Tax investigations and tax disclosures are an extremely specialised area of work, best handled by those with the relevant skills and experience.

The team at Admiral Tax Investigation is made up of former HMRC civil and criminal investigators, affording our clients decades of internal tax investigation experience gained within the departments formally known as Inland Revenue and Customs and Excise

When allied to a proven track record of success within private practice, quite simply, you could not have a better company representing you.

Below and to assist you further, you will find a copy of an information leaflet we have put together regarding "THP".

It answers many of the questions you may have regarding the project as a whole, including:-

• The background to THP
• What information HMRC may hold about medical professionals
• The disclosure process
• The potential consequences of failing to come forward

Please take some time to take a print of this leaflet and bring it to the attention of relevant staff.

We offer no fee, no commitment consultations during which time we will be happy to answer any further questions that you may have.

If you wish to discuss any aspect of this project or indeed any other matter associated with your tax affairs then please do not hesitate to make contact

Admiral Tax Investigations

Tax Health Plan - Information Sheet 1

HM Revenue & Customs (HMRC) is offering an opportunity for medical professionals with undisclosed tax liabilities to come forward and settle their affairs.

The project entitled "Tax Health Plan" (THP) begins with immediate effect.

In this article Admiral Tax provide health professionals and if appropriate and their advisers the comprehensive background information and advice needed to assess whether or not a disclosure to HMRC may be required.

1. General

 

1. How does the THP work?

You must notify HM Revenue & Customs (HMRC) of your intention to make a disclosure by 31 March 2010.

You must:

• make a full disclosure of all undeclared liabilities.
• disclose and make full payment of all outstanding taxes and duties, interest and penalties by 30 June 2010,
• The penalty you should include in your disclosure is fixed at 10 per cent of the taxes/duties you have underpaid unless:-

- the total amount of unpaid liability being disclosed is less than £1,000 in which case you need not pay a penalty or

- you can make a personal disclosure or disclose on behalf of another taxpayer, for example a company, trust or deceased person

• Agents can notify and disclose on behalf of clients.

 

2. What disclosures are unlikely to be settled through THP?

HMRC anticipate that the vast majority of disclosures will be accepted.

However, certain disclosures are unlikely to be settled under THP, including:

• Any disclosure that is found to be materially incorrect or incomplete when checked by HMRC for accuracy and completeness.
• Any disclosure by a customer who is currently the subject of an ongoing HMRC investigation. In such circumstances those who want to disclose liabilities should inform the investigator who has conduct of the enquiry. A full and early disclosure will influence the amount of penalty HMRC seek in any ongoing investigation
• Disclosures where HMRC believe the money that is the subject of the disclosure is the proceeds of Serious Organised Crime. This includes VAT Missing Trader Intra Community (MTIC) fraud, VAT Bogus Registration fraud or Organised Tax Credit fraud and those involved in any wider criminality (such as an ongoing police investigation).

 

3. Will I be prosecuted for tax evasion?

Highly unlikely!!!

Although HMRC cannot guarantee that a disclosure will not become the subject to a criminal investigation, it is a remote possibility.

Factors considered when deciding whether to undertake civil or criminal investigations into cases of fiscal fraud is whether there is a complete and unprompted disclosure of any amounts evaded or improperly reclaimed. Whilst HMRC will consider each case on its merits, with the exception of cases where we believe the subject of the disclosure is the proceeds of Serious Organised Crime a complete and unprompted disclosure will generally suggest that a civil course of action is appropriate.

 

4. Can I make a disclosure if my outstanding liabilities are not connected to income as a Medical Professional?

You can still make a disclosure and put your tax affairs in order even if you have not received income as a medical professional that has been connected with a loss of UK tax. The disclosure will not be part of THP and therefore the fixed penalty under THP will not be available, but customers who make a full and voluntary disclosure of all unpaid liabilities in these circumstances can expect a lower penalty than HMRC would otherwise seek if they commence an enquiry or compliance check without the disclosure.

 

5. What happens if I have undeclared liabilities and choose not to disclose?

After 31 March 2010, when the notification period ends, HMRC will begin to use the information they have on payments from NHS trusts, private hospitals and medical insurers. They will review the affairs of customers whose payment details they hold and who have not notified their intention to make a disclosure.

HMRC will identify those who they believe should have come forward by:

• comparing the information already in their possession with customers� UK tax histories
• continuing to use their formal production powers to obtain detailed information about other payments made

Formal tax investigations will follow where potential irregularities are identified.

Penalties sought by HMRC will be much higher and could be as much 100% of any unpaid liabilities. In any event penalties are unlikely to be less than 30%.

If a disclosure made within the terms of this disclosure opportunity is incomplete, or there is a failure to disclose amounts liable to tax or duty, HMRC will consider the instigation of a criminal investigation.

 

6. Will HMRC advise the General Medical Council?

Your tax affairs are confidential. However if you are charged or found guilty of a criminal offence in relation to your tax affairs it is your responsibility to inform the GMC.

 

7. What should I do now to prepare my disclosure?

Quite simply you should contact a tax investigation professional without delay. HMRC will not calculate the liabilities for you as part of the THP disclosure procedure.

 

8. What should the disclosure contain?

Your disclosure must contain:

• disclosure of at least one unpaid tax or duty (for example Income Tax)
• a summary of all taxes and/or duties, interest and penalties due for up to 20 years
• an offer to pay
• a declaration that the disclosure is correct and complete to the best of your knowledge, information and belief
• Payment of the full amount disclosed, including interest and penalty due.

 

9. I don't have complete records, what do I do?

Do not worry.

If your records are incomplete you should make your best estimate of the undeclared income and gains and use this to make your disclosure. HMRC may ask you to justify any estimates you have used. HMRC appreciate the particular difficulty in obtaining missing bank statements and expect that in the vast majority of cases it will be possible to make reasonable estimates on the basis of recent statements. HMRC would only expect you to obtain further statements where you are unable to make reasonable estimates from the records available to you.

Again it is recommended you seek professional advice before attempting to quantify any tax that may have been lost.

 

10. Am I entitled to any deduction in calculating undeclared income, profits or gains?

Yes, in most situations you will be able to claim allowable deductions and reliefs. Your tax adviser can help with this.

 

11. If I make a disclosure now, what penalty will I have to pay?

In most cases, penalties will be fixed at 10 per cent of the undeclared taxes/duties and Class 4 National Insurance contributions.

If the total amount of the unpaid taxes and duties being disclosed is less than �1,000, you need not pay a penalty.

2. The Offer

 

1. Why do I need to make an offer?

It is a condition of using THP that you make an offer for the full amount of taxes, duties, interest and penalties. Together with HMRC�s acceptance letter to you, this creates a formal contract between you and HMRC

 

2. How do I pay?

Your payment must reach HMRC by 30 June 2010. HMRC accept payment by a range of methods but recommend payment is made electronically. Electronic payments are more efficient and secure than payment by post.

 

3. What if, exceptionally, I cannot pay the full amount?

If, exceptionally, you cannot pay the full amount contact HMRC through your tax adviser as soon as possible and before the relevant disclosure deadline of 30 June 2010

3. Submitting the disclosure

 

1. What happens once I submit my disclosure?

The disclosure will be considered within the terms of the Tax Health Plan.

HMRC expect most disclosures to be self explanatory but HMRC may need to contact you or your tax adviser, if you have one, to clarify any points.

You may also be asked to provide appropriate evidence of your circumstances to satisfy HMRC that your disclosure is complete. Your full co-operation is one of the conditions of using this opportunity and failure to co-operate may jeopardise acceptance of your offer.

4. Accepting your disclosure

 

1. Will my disclosure be accepted?

HMRC will review all disclosures after 30 June 2010. HMRC expect the vast majority of disclosures to be accepted and where this is the case HMRC will send you a letter accepting your offer as soon as possible.

5. Meeting future obligations

 

1. What do I do about liabilities I have for 2008/9 or later periods?

THP is the opportunity to put your tax affairs in order up to 5 April 2008. If you have liabilities that have not been disclosed for periods after 5 April 2008 you should:-

(i) Complete the income tax, company tax, employers or VAT returns that HMRC sends you or if already completed them advise the HMRC office that usually deals with your affairs that you have an amendment to make;

Or

(ii) If you do not currently make a return register with HMRC immediately. Again your tax adviser can help with this.

6. Summary of key dates

 

Notify your intention of disclosure by 31 March 2010.

Submit your disclosure in writing using the forms provided by 30 June 2010.

Make full payment with your disclosure.

Admiral Tax Investigations guarantee all fees up front, so you our client can plan appropriately and worst of all avoid any unexpected billing surprises.

For a no commitment, confidential discussion about how we can resolve your tax investigation and save you money, contact Admiral Tax Investigations day or night:

Previous Articles