Tuesday, March 1, 2011

Last chance for tax cheats to get their tax affairs straight

Last week HMRC published a statement about how they are going to manage deliberate defaulters by a new programme of special rules. The intention is that anyone who is identified as a deliberate tax defaulter will will have their tax affairs closely scrutinised - not just when they are caught but for the next five years too.

This week HMRC announced the Plumbers Tax Safe Plan (PTSP) - which I mentioned in an earlier blog post. This Plan contains a very useful facility. ANYONE can ask to get their tax affairs straight - and benefit from the same offer of a 20% cap on the penalties that will be charged. This should mean you can avoid being subject to ongoing scrutiny for the following five years.

Previous tax disclosure facilities have been criticised as they were specific to people in certain situations or businesses. This time round though the paperwork is very clear and HMRC says:
Customers who voluntarily come forward and put right their tax position can expect very similar terms to those on offer through PTSP. If you do not come forward and HMRC later find that you owe additional tax, you may face higher penalties or even criminal investigation.
I doubt that there will ever be a better time to take specialist advice to help you bring your tax affairs in order. Anyone who wants to use the PTSP to come clean on past tax arrears must register for the scheme by 31 May and will need to pay any back taxes plus interest and penalties by 31 August.

The maximum penalty under this scheme, of 20%, will be reserved for cases where more serious and “deliberate” irregularities have occurred. In such circumstances, the taxman will seek back tax over 20 years. This is why it is so important to work with experienced tax specialists who have plenty of experience of negotiating settlements with HMRC in respect of previously undeclared taxable income.

Anybody with extra income or gains to disclose, whether in the plumbing industry or not, should seriously consider coming forward now. Those who do not and who are subsequently found out will be liable to penalties of between 35% and 100% of the tax evaded. And may well be subject to increased scrutiny for the next five years. The rules are changing. Tax cheats - whether local tradespeople, property owners, entrepreneurs or anyone else are all in the same boat. Make sure yours has a paddle - or even a motor!

1 comment:

  1. In the past week I have had 2 tilers cease S/E as they cannot compete on price with unregistered businesses, or people with day jobs who are moonlighting in the evening and at weekends. One potential client even told one of the the tilers that she got the tiler's mobile number through an advert. in the local free press, knew him, knew that he was working in Glasgow, but reckoned that at half the price, in these days of austerity, she could not refuse.