It was announced in January that HM Revenue & Customs (HMRC) are offering a “tax amnesty” for medical professionals who are regulated by the General Medical Council, under what is being called the Tax Health Plan. Shortly after the announcement, the Tax Health Plan was extended to cover individuals regulated by the General Dental Council. The Tax Health Plan offers the opportunity for taxpayers to make a disclosure of previously understated tax liabilities, with any penalty limited to 10%. It is understood that the Tax Health Plan covers both individuals and companies.
It has been suggested that the amnesty has been offered following several enquiries into the tax affairs of medical professionals revealed that income from private patient work had not been included on Tax Returns. No previous amnesties have been aimed at a single profession, but the current amnesty is likely to be followed by similar amnesties for other professionals, as the Government looks to bring in as much extra revenue is possible, at the least cost, as they attempt to reduce their massive budget deficit.
Anyone planning to take advantage of the amnesty needs to register their intention to make a voluntary disclosure before 31 March 2010. They will then be offered the opportunity to make the disclosure by 30 June 2010, and by that time make arrangements to pay all tax, interest and penalties due. It is understood that the amnesty will only relate to periods before 6 April 2008, as penalties were significantly increased for later periods.
The intention to make a disclosure can be made by either telephoning HMRC or by using the e-form available. By providing a full and accurate disclosure of any income on which tax has not been paid, or expenses that have been overstated, together with full payment by 30 June 2010, taxpayers should receive a reduced penalty of 10%. If a disclosure is not made under the Tax Health Plan and underpaid tax is discovered by HMRC, a taxpayer could face a penalty of between 20% and 100% of the tax due and/or criminal investigation.
HMRC will be using the new powers they have recently been given to obtain information from third parties. This will enable requests to be made to NHS Trusts, private hospitals and private medical insurers to provide details of payments made to Doctors and Dentists. This information will then be compared to the income declared on Tax Returns.
Taxpayers who may wish to make a disclosure under the amnesty should speak to their Tax Advisers as soon as possible so that the relevant notification is made by 31 March 2010. Dental professionals should review their affairs to ensure that they have not inadvertently omitted to disclose income or overstated expenses. This could include, for example, motor expenses claimed for business travelling, understating year-end debtors or stock.
Find Graham Rew of Hazlewoods LLP at www.aspd.co.uk