Taxman to give Midlands Doctors a full check-up

Medical professionals in the Midlands risk targeted investigations by HM Revenue & Customs (HMRC) if they fail to declare potential understated income under a new Tax Health Plan.

 

 

Tax revenues slow down in times of recession. But government expenditure levels continue. So there is enormous pressure on HM Revenue & Customs to find new ways of maximising the tax-take with minimum effort.

 

We saw the first example of this in the autumn with the so-called New Disclosure Opportunity. That provided a carrot and stick incentive to taxpayers with undisclosed income from overseas bank accounts to disclose the detail to HMRC. The carrot was the offer of a self-assessing 10% penalty on top of the unpaid tax (and a related interest charge). The stick was the threat of penalties of up to 100% and even prosecution for those who chose to ignore the opportunity and run the gauntlet.

 

Perhaps HMRC has tasted blood. HMRC has just announced a new initiative on very similar lines to encourage professionals to clean up their tax affairs. First in line for the new treatment are medical professionals. From 11 January to 31 March 2010, they can register their intention to make a disclosure to HMRC. They will then have until 30 June 2010 to report relevant details to HMRC, self-assess their 10% penalty and pay the relevant tax, penalty and interest.   

 

Will Silsby of Worcester-based Rabjohns LLP says, “It is not surprising that HMRC is targeting medical professionals. Whilst the majority of medics are probably so careful with their tax affairs that they are actually over-declaring their taxable income, stories of ash-cash and other undeclared income abound. And HMRC has information from all sorts of sources about possibly undeclared income.”

 

Silsby estimates that there are 30,000 registered medical practitioners in the West Midlands area and if only 5% of them declared an average amount of previously undisclosed income (covering whatever period of time) of say £10,000, that would produce additional tax revenue of about £7million.

 

He commented, “Compared to the government’s healthcare expenditure of £7 billion in the region, that’s only a drop in the ocean but I’m sure Alistair Darling would see it as a very useful drop.”

 

Silsby added, “HMRC’s announcement strongly suggests that the medics are just the first in a succession of campaigns to get professionals to shop themselves. Who will be next in line? It’s a case of ‘watch this space’.

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