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Our Services >> Tax Health Plan |
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| Tax Health Plan |
The Tax Health Plan (THP) recently announced by HMRC is an opportunity for medical professionals with potential tax issues to get their affairs up to date. The THP will operate in two stages:
- From 11 January to 31 March 2010, medical professionals can register their intention to make a voluntary disclosure to HMRC under the plan.
- By 30 June, those who have registered must have made their disclosure as well as made arrangements to pay all tax interest and penalties due.
- If HMRC receives a full and accurate disclosure of any income on which tax hasn't been paid, along with full payment, by 30 June, those who qualify, can expect to pay a reduced penalty of 10 per cent.
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| Why is HMRC looking at the medical profession? Common errors made can include: |
- Failing to fully return income from all sources (different medical contract income, earnings from other hospitals, locum income).
- Not operating IR35.
- Failing to correctly account for trade debtors and other accountancy issues.
- Over-claiming expenses such as:
- The costs of working from home
- Travelling costs (whether calculated in accordance with employment or self-employment rules)
- Wife's wages
- Expenses such as training fees and associated costs also need to be reviewed carefully in the light of recent tax tribunal decisions.
At first glance, a maximum 10% penalty compares favourably with the standard penalty regime which could result in much higher levels of penalties. It appears that the opportunity is restricted to doctors and, as of 18 January, to dentists, following an appeal by the British Dental Association, but is not necessarily available to all the other types of medical professionals for whom other routes of disclosure may be more appropriate. |
| How can we help? |
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It is essential that anyone who thinks they may have issues relevant to the THP seeks appropriate specialist advice immediately and that most certainly applies to anyone with potentially serious issues. Whilst many advisers are keen to stress the basic features and time limits of the THP there are additional underlying issues to consider:
- The THP may not be the best route for some to clear outstanding matters with HMRC; particularly those with serious issues or for whom immunity from prosecution is essential; other options may be advisable.
- THP disclosures will be 'checked' or investigated and those found to be materially incorrect or insufficient will not benefit from the favourable terms offered and may face prosecution as a result.
- Any disclosure to HMRC must be supported and evidenced so it can be defended if HMRC challenge it; this process must be properly managed from start to finish.
- For those with relevant issues to disclose doing nothing is not advisable; this will be the only opportunity to secure certainty on favourable terms.
We have a significant level of relevant tax investigations experience, a deep knowledge of HMRC's structure, practices, and compliance powers. We have extensive experience of making appropriate disclosures to HMRC through various routes.
We are available to help you achieve the best outcome through the THP, or indeed any investigative situation, we can:
- Consider any concerns and explore the potential options that may be available.
- Assess the inherent risks.
- Make appropriate disclosures to HMRC.
- Properly manage the disclosure process from start to finish.
- Deal with any questions, challenges or investigation initiated by HMRC.
- Negotiate the best outcome.
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| RTS Investigations Limited (trading as Rooney Tax Services), registered in England & Wales number 07434036. Registered office: 4 Howarth Court, Water Orton, North Warwickshire, B46 1RF |
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