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HMRC targets medical professionals – others may follow
We have all become accustomed to HM Revenue and Customs’ never-ending round of crackdowns and amnesties, designed to catch people it believes may be avoiding paying tax.
Previously this has tended to affect two ends of the earnings scale – the super-rich who may have money stashed abroad at one end, and the low earners who may take on cash-in-hand jobs at the other.
However, HMRC’s latest wheeze involves targeting high-earning professionals in the medical sector, such as GPs, hospital consultants and dentists, which has sparked fears that other ‘middle class’ professions, such as vets, barristers or lawyers, could be next.
Under the Tax Health Plan (THP), HMRC is using new powers to obtain information about individuals’ financial affairs and is approaching NHS trusts, private hospitals and private medical insurers to gain more information on payments that have been made.
Examples of tax evasion among the medical profession cited by HMRC include not declaring fees for private work, payments for consultation work, or payments for drafting medical reports.
Anyone with outstanding liabilities will be required to pay the tax due, any gains arising on their unpaid tax, interest and, in most cases, a fixed 10% penalty.
Those working in the sector have until March 31 to make a voluntary disclosure about any income they owe and, as with most amnesties, anyone who does not declare additional information now is likely to face tougher punishment if tax evasion is subsequently uncovered, including penalties of up to 100% of the tax involved and even criminal prosecution, as well as the prospect of being ‘named and shamed’ on the revenue’s website.
At the launch of this crackdown, HMRC director of risk and intelligence Mike Wells urged people to make contact with HMRC now to get their tax affairs in order, adding ominously, ‘contact us before we contact you’.
Given the current economic climate, it is likely that the government and HMRC will continue to crack down on anyone they consider not to be paying their fair share. Therefore, it does make sense for taxpayers to ensure their affairs are in order, and for anyone who has not declared earnings in the past, it is better to do so now, on favourable terms, than to be caught up in a lengthy and costly investigation in the future.
For more information or advice please contact us.
John Kinsella
Watson Buckle