Monday, January 11, 2010

Taxman targets evasion by Medical professionals

Medical professionals are being encouraged under a new Tax Health Plan to tell HM Revenue & Customs (HMRC) if they have been evading tax. In effect they are being provided with the best opportunity they will ever have to regularise their tax affairs with the promise of a minimal penalty.

The Tax Health Plan is the first initiative in a new HMRC campaign focused on professionals. It seems that more such focused initiatives will follow. Much as with the Offshore Disclosure Facility and the New Disclosure Facility, this initiative promises a 10% cap on the penalty for previous non-disclosures.

HMRC make the point that these terms are in line with those offered for any full and accurate unprompted voluntary disclosure of tax liabilities. So is there really any incentive to come forward during the 'disclosure window' that closes on 31 March 2010?

I think there is. In effect HMRC are giving medical professionals a last chance to make an unprompted disclosure. From April it will be too late as HMRC will be writing to those professionals it believes have undisclosed income from, for example, NHS Trusts, private hospitals and private medical insurers. It seems that HMRC have been collating details of payments made by such entities that it suspects the recipients have not fully disclosed. From April the penalty will rise from 10% to at least 30% and possibly upto 100% - see: The new penalties regime - making tax taxing.

It's worth stressing that in all such cases there is no tax 'amnesty'. The 10% penalty will be by reference to the tax previously unpaid. This will also be payable together with interest on the late payment.

HMRC suggests that anyone interested in taking advantage of this facility should contact them. I disagree. I advice that more objective advice will be provided by an independent tax expert.


  1. Hmm, is there really that much undisclosed income from medical professionals. Seems unlikely to me. If HMRC has all this data pointing to under-declarations why don't they write a simple program to compare the two sources of data and write appropriately to the taxpayers, instead of smearing all medical professionals? (I am not one.)

    Mark Deacon

  2. Thanks for your comment Mark. I think it's fair to assume that HMRC have done some cross matching and concluded that there are plenty of medical professionals who have not been disclosing all the income they receive. I'm as surprised as you.

  3. I have an open mind about the worth of the information as recent actual experience suggests that HMRC may well have another golden egg

  4. A lot of doctors do private and NHS work which may be freelance/self employed and PAYE. Then there's locum work and consultancy and call work, which may be paid separately. It wouldn't surprise me if a lot of medical professionals didn't know they need to declare and submit tax returns if they're paying PAYE and aren't running their own practice.

    There was a question on Money Box Live about this recently - a doctor who had several strands of income and I'm glad I don't have the tax return he was recommended to do.

  5. This Tax health plan with work for getting tax with many medical professionals .Medical Locum Work