Tax disclosure deals for all, suggests the CIOT

Thursday, 14 January 2010 12:00 AM

The recent announcement by HM Revenue & Customs (HMRC) of a 'disclosure opportunity' for medical professionals (the Tax Health Plan or THP) would logically lead to a similar arrangement being available to all taxpayers as a matter of fairness, says the Chartered Institute of Taxation (CIOT).

Under the THP, eligible people can disclose their arrears and then settle their tax affairs with only a 10% penalty rather than a penalty that might reach 100%.

Gary Ashford, chair of the CIOT's management of taxes committee said:

"Whilst we welcome HMRC encouraging people to get their tax affairs in order, there is a measure of unfairness in offering a deal to one sector of the population and not to others. Surely it would be better to have a general arrangement available to all and a concerted effort by HMRC to get their message over?"

The CIOT has concerns that the way HMRC are offering different disclosure facilities to various groups with short time windows is not ideal. It will also make others who wish to get their tax arrears in order wonder whether they should wait for 'their' opportunity.

Gary Ashford continued:

"It would be sensible to consider a genuine one off disclosure for everyone. And one that lasts sufficiently long and is sufficiently attractive to get people to come forward. This could enable them to clean the slate before the advent of the harsher 'Naming and Shaming' rules that come in from April 2010."

Notes to Editors

1) The THP follows the various arrangements over disclosure of undeclared overseas income and takes a similar route.

The THP is open to medical professionals with tax irregularities arising from undeclared earned income. HMRC has obtained information about payments to medical professionals from NHS Trusts, private hospitals and medical health insurance companies. It requires a medical professional who wishes to take advantage of the disclosure opportunity to disclose by notifying HMRC of their intention to make a disclosure by 31 March 2010 and then disclosing by 30 June 2010.

Those taking advantage of the THP will have to pay the tax involved together with interest, but will only face a 10% penalty, instead of the potential 100% penalty that could be applied. This is in line with the various offshore disclosure offers HMRC have made.

2) The 'Naming and Shaming' Legislation in Finance Act 2009 applies from April 2010 to allow HMRC to name deliberate tax defaulters whose tax default exceeds £25,000 and publish their details. This new penalty applies to periods of offence from 1 April 2010.

3) The Chartered Institute of Taxation (CIOT) is a charity and the leading professional body in the United Kingdom concerned solely with taxation. The CIOT's primary purpose is to promote education and study of the administration and practice of taxation. One of the key aims is to achieve a better, more efficient, tax system for all affected by it - taxpayers, advisers and the authorities.

The CIOT's 14,900 members have the practising title of 'Chartered Tax Adviser'.

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