28,000 medics reminded of tax health plan

Around one in ten medical professionals is set to receive a letter reminding them about HMRC’s tax health plan (THP).

Individuals who intend to use the THP to disclose previously undeclared income have until 31 March to inform the Revenue of their aim to do so. The department has confirmed that the deadline will not be extended.

Individuals will then be expected to make their disclosures by 30 June, when they must also pay all taxes due plus interest and a reduced penalty.

HMRC have begun writing to around 28,000 taxpayers – doctors registered with General Medical Council and dentists – who have not registered with the THP. This is estimated at about 10% of the UK’s medical professionals.

The standardised letter follows the taxman’s receipt of information from NHS trusts, private hospitals and medical insurers, which the taxman will have compared against individuals’ tax returns, according to Mark Taylor of the tax investigations division at Vantis accountancy.

The Revenue carried out an exercise looking at doctors’ private practice income some years ago, claimed Mr Taylor, but in many cases the data did not produce extra tax, and this is likely to be the case on this occasion.

‘The problem is that the information may not be accurate, and so HMRC will not get the results they are expecting,’ he said.

However, a taxpayer who does receive such a letter would be well advised to write back to the Revenue, remarked Gary Rowson, head of tax investigations at Vantis.

‘A doctor or dentist who receives a letter from HMRC suggesting he or she should be “interested in the tax health plan” and then decides not to make a disclosure risks being subjected to an in-depth investigation of all their financial affairs,’ he said.

‘If errors are found and additional tax is due, [the taxpayer] will be charged significantly higher penalties. In more serious cases, involving either non-disclosure or an incorrect disclosure, HMRC will consider prosecution.’

A similar approach was taken by the Revenue during the offshore disclosure facility (ODF) of 2007, when the taxman wrote to thousands of offshore investors identified from information obtained from high street banks.

This led to a surge in ODF disclosure notifications shortly before the deadline, said Mark Taylor, who suggested that, ‘HMRC hope for a similar success under the THP’.

A Revenue spokesman said the standardised letter being sent out is intended to raise ‘awareness’, and the department is ‘using the data we hold to contact a minority of doctors and dentists where that data gives an indication that the THP may be relevant for them’.

He added: ‘The letter does not in any way represent a suggestion by HMRC that a person has something to declare. We have simply analysed the data we hold to ensure we have told people about the THP, where we think there may be an increased chance that the [disclosure initiative] may have some interest for them.’

John Cassidy, tax investigations partner at business advisers PKF was cynical about the taxman’s intentions, believing that, ‘HMRC are writing only to those doctors and consultants they suspect have not declared all their income – and the department probably has the evidence to prove it.’

Issue: 4248 / Categories: News , tax health plan , Admin , Income Tax