Launch of HMRC’s “Tax Health Plan”

HMRC has recently launched a new initiative focussing on medical professionals who have undeclared tax liabilities and they are encouraging offenders to come forward under what they are publicising as a new "Tax Health Plan" (THP).

Paul Guest, partner and healthcare industry specialist at Peplows accountants warns, “Failure to take advantage of the “amnesty” by anyone subsequently investigated and found to have been avoiding tax, may result in penalties being levied at up to 100% of the unpaid tax, with a minimum penalty of at least 30%.”

HMRC has information suggesting that some medical professionals may be understating the amount of earnings upon which tax is due. Under the new plan, doctors, dentists and hospital consultants are being given the opportunity to come forward and declare past tax irregularities.

The scheme will work in a similar way to the well publicised offshore disclosure facility - if the medical professional makes a full disclosure of undeclared income then he/she will be able to benefit from a reduced 10% penalty. The basic requirements are:-

• The medical professional has until 31 March 2010 to register his/her intention to make a voluntary disclosure.

• He/she then has until 30 June 2010 to make the disclosure and arrange for payment of all tax, interest and penalties.

• The intention to disclose can be made by phone (0845 600 4508) or by using the e-form available via the link on the HMRC website: www.hmrc.gov.uk/tax-health-plan.

It is understood that HMRC are looking for hospital consultants to come forward with undeclared commissions as well as fees from medical insurers.

HMRC are believed to have already issued formal notices to BUPA, Sun Life and other institutions to obtain details of commissions paid. They are also gathering information from employers and NHS Trusts.

“Our concern is that the financial affairs of health professionals are often complex with multiple legitimate income streams and there is a much greater risk of HMRC making enquiries in circumstances where there is no risk of loss of tax than was the case with the offshore disclosure provisions. It has been stated that even at this early stage upwards of 800 potential enquiry cases have been identified,” said Paul.

It is recommended that professional advice is taken in relation to any concerns before giving notice of intention to disclose and/or making any form of disclosure. Call Paul on 01392 223930 or email paulg@peplows.co.uk