Tax Health Plan. What if you choose not to disclose?  

HMRC have offered a tax amnesty relating to medical professionals (tax health plan) so what are the likely consequences if an individual chooses not to disclose any tax evasion as part of the tax health plan initiative?

Although a number of people are expected to take advantage of the tax health plan tax amnesty it is expected that a significant number of people will not take advantage of this tax amnesty.

HMRC have stated in their literature relating to the tax amnesty for which the deadline for making an initial disclosure is 31 March 2010 that after 1 April 2010 when the notification period ends they will, in their enquiry work, target medical practitioners who do not disclose".

Thus it is clear that there HMRC will pursue medical practitioners if they do not disclose any tax evasion under the tax health plan tax amnesty

There are several routes that HMRC could take. It is expected that HMRC will filter the information held in monetary terms. Enquiries will then be undertaken and the following are some of the areas where HMRC are expected to take action.

Prosecution

It is believed that a small percentage of these may be selected for potential prosecution in accordance with the published Criminal Investigation policy (http://www.hmrc.gov.uk/prosecutions/crim-inv-policy.htm). One of the reasons for prosecution is as a deterrent effect and to publicise that people can go to prison for tax evasion. Although not many people will be prosecuted there is the real risk that this will happen to some. If convicted of tax fraud we believe it is the duty of the medical practitioner to notify this to the GMC of this.

Civil Investigation of Fraud Procedures

The Civil Investigation of Fraud procedures come into effect when HMRC uncovers evidence of serious non-payment of tax, which they feel may be caused by tax fraud or tax evasion. The amount of underpaid tax in question is always suspected to be more than £75,000, and a civil investigation of fraud enquiry will be undertaken when HMRC feels that a criminal prosecution is not necessary. If an individual deliberately makes material errors in a civil investigation of fraud case they may face a criminal prosecution in the future. The minimum level of penalty in a Civil Investigation of Fraud case is usually 25% and the usual level is between 30 and 40% even if handled well. Theoretically the penalties can be up to 100% of the tax due. As part of the civil investigation of fraud procedures, provided that the individual admits to tax fraud they are expected to engage an advisor to prepare a disclosure report covering the last 20 years tax history. The costs of this report are not tax deductible.

Normal Tax Investigation

HMRC can use their powers to open an enquiry into an individual's or company tax return. Under the self assessment rules there are time limits for doing this unless HMRC can prove that they have discovered that there have been omissions from tax returns which they could not reasonably have been expected to know. Given the information available to HMRC as part of the tax health plan it is believed that they will have sufficient evidence of tax evasion to open an enquiry using the discovery proceedings. Generally these will be cases where the tax is believed to be in excess of £1000 but less than £75,000. Again penalties in these sort of cases are expected to be a minimum of 25% and could rise to 100% of the tax due.

Timing

Given the wealth of information it is expected that the information held will keep HMRC busy for the next few years. Thus even if they do not contact you immediately HMRC has a number of years to use the information and it could be anytime in the next few years that the dreaded brown envelope lands on the doormat.

Name and Shame

HMRC have recently introduced powers to enable them to name tax evaders in certain circumstances.

HMRC will be able to make public the details of taxpayers (individuals, businesses and companies) who are penalised for deliberately understating tax due which results in tax lost of more than £25,000.

This power will not be used where the taxpayer has either made an unprompted voluntary disclosure to HMRC of or makes a full disclosure within a specified time period when asked to do so by HMRC.

The details to be published include the name and address of the individual or company, their professions, the amount of tax, interest, penalties and the time period over which the tax fraud was committed. Details will then be published quarterly on HMRC's website, and will be removed from the website after 12 months. Thus there is a possibility that other parties (such as the press) may pick up on the more high profile individuals and people could see their details published in the media.

How can Gilbert Tax help me?

Gilbert Tax have helped hundreds of people through the perils and pitfalls of the last tax amnesty. For further information about how we can help you in the current tax amnesty (new disclosure opportunity) call us for a confidential free discussion on 0800 734 3333 or e-mail scott.gilbert@gilberttax.co.uk now

Gilbert Tax:

• Are non- judgemental.
  
• Rigorously defend your position within the scope and parameters of the law.
  
• Take control of the investigation.
  
• Focus on working towards the most cost effective and efficient way to achieve the closure of the tax investigation.
  
• Encourage you to concentrate on your business and leave dealing with the Inland Revenue to us.
  
• Pride ourselves on caring vehemently about our clients and that they are treated justly and fairly within the scope of the law

Between the 6 partners and 2 members of staff Gilbert Tax has over 90 years' experience of tax investigations from both working for HMRC and spending significant time in top accountancy firms tax investigation teams defending businesses subject to Inland Revenue Investigations. Gilbert Tax offer a unique blend of relevant experience at affordable prices.

For a private discussion about how we can resolve your tax investigation and potentially save you money contact us at any time on 0800 7343333. Our initial discussion will be undertaken without charge. Although based in the North of England we have clients all over the country

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