Taxman’s Warning To Medical Professionals

HMRC’s recently announced Tax Health Plan, a so-called “amnesty” on the tax affairs of medical professionals, is really a thinly veiled threat. They’re coming to get you, ready or not.

The Plan allows medical professionals with undisclosed tax liabilities to settle their affairs with HMRC, and benefit from reduced penalties.

To benefit from the amnesty, medical professionals must contact the Revenue by 31 March 2010. After that date, HMRC has made it plain that the amnesty will not be offered again.

How the Plan works
The Plan is aimed at medical professionals such as consultants, surgeons and dentists with unpaid taxes and duties.

The Plan allows such professionals to make a disclosure of their tax position to HMRC – and thus ensure certainty of treatment. If a proper disclosure is made, there will be a penalty of 10% of the unpaid tax (or, if the unpaid tax is less than £1,000, no penalty at all).

However, if no disclosure is made, doctors and their ilk can expect the Revenue to clamp down hard – with penalties of up to 100% of the unpaid tax, and even a potential criminal investigation. There is also the possibility of public naming and shaming.

No place to hide?
Don’t underestimate the Revenue’s power to find out about your tax affairs if you don’t voluntarily disclose. HMRC has extensive legal powers allowing it to get information about your income from a variety of third parties.

They have already sought information about medical professionals from sources such as NHS trusts, private hospitals and medical insurers. Now they are in a position to match that information against the tax returns of doctors, dentists and others.

HMRC have already used their powers in a previous disclosure opportunity for those with undeclared overseas income, using their powers to obtain information about offshore bank accounts from UK banks. That disclosure opportunity resulted in 10,000 disclosures to HMRC.

What to do
If you’re in this position, you must:

• Notify HMRC of your intention to disclose by 31 March 2010; and
• Make a disclosure to HMRC by 30 June 2010;
• Pay any outstanding tax, plus the 10% penalty.

We would strongly recommend you to contact a professional adviser to assist you if you think your tax affairs are anything but squeaky clean. If you don’t take the opportunity offered by the taxman, you can expect little leniency when it comes to future penalties.

You can get more information on the Tax Health Plan by visiting the Revenue’s website at: www.hmrc.gov.uk/tax-health-plan.

Published 03/02/2010. The author of this article is Sarah Anderson