Tax Amnesty for the Medical Profession

For the first time a particular profession has been singled out for a closer look by H M Revenue & Customs.

They are offering a “tax amnesty” to the medical profession – an encouragement to disclose any past irregularities that have resulted in an underpayment of tax.

HMRC have even given the amnesty a name, the Tax Health Plan (THP).

The amnesty covers all taxes, inheritance tax, capital gains, income tax, and not just income from professional fees but includes investment income.

HMRC is in the process of collating further information from NHS trusts, private hospitals and medical insurers about payments made to medical professionals. It will then cross check this information against tax returns made by consultants, surgeons and doctors, etc, to ensure there has been a full disclosure of all of their income.

HMRC has investigated medical professionals before, looking for undeclared income from such sources as private fees or the rather morbidly termed ‘ash cash’ (crematorium fees), and also on the proportion of business expenses claimed. However, in the past these types of enquiries have always been one-offs aimed at a single individual. Now HMRC is examining a whole sector and giving the qualifying individuals the chance to come forward before HMRC starts investigations that could lead to criminal prosecutions.

Disclosed omissions will be subject to a fixed penalty of 10% of taxes due.  If an affected taxpayer does nothing and waits for HMRC to come knocking, the penalty is likely to be a minimum of 30% of any tax due. A quicker, controlled, disclosure may also be less painful than a lengthy intrusive investigation by an Inspector.

If you are a medical professional and are concerned by this development please call and make an appointment. We have until the 31 March 2010 to advise HMRC that we will be making a disclosure and have to submit the details with a calculation of tax and penalty due before 30 June 2010.

Payroll Online Deadline

This year ALL employers are required to file their year end returns online, so there is quite a bit to think about over the coming months, particularly for those who have not yet registered to file online.

DIY filing

If you intend to file your own return online, you will need to ensure that you have registered and activated the PAYE service. If you have a Government Gateway log-on as a business, you can check that you have activated PAYE filing by logging on and checking which services are available to you. If you cannot see PAYE on the list, the service offers you the opportunity to register. Allow time for the relevant pin to be sent through by post.

We can file for you…

Of course you do not have to submit the forms yourself – we can do it for you. Just call and we’ll deal with all the registration and filing formalities.

Problems with incorrect code numbers.

Due to the activation of a New PAYE Service a significant number of Notice of Coding issued by HMRC are incorrect. If you are already registered for online services, changes to your code number will be issued via your electronic mailbox rather than on paper.

If you feel that any variation in your code number looks suspicious let us know and we will check it out for you.

Late payment penalty

From April 2010 payments of PAYE/NIC must be paid by the monthly due dates or penalties may be levied.

VAT Online Deadline

Who must file on line…..and when?

There are two categories of businesses that have no choice about online filing after 1 April 2010:

          ·      newly VAT registered businesses with a registration date of 1 April 2010 or  later
          ·      any business with annual turnover exceeding £100,000

The £100,000 limit will be based on VAT returns submitted in 2009, the sales figure entered in Box 6.

How to register for online filing

It is likely there could be a last minute rush to register for online fling in March 2010. So best to be ahead of the game and register as soon as possible.

The actual registration process is very simple. However, be aware that you need five pieces of information to complete the process:

           1.     VAT registration number
           2.     Post code of principle place of business i.e. address where VAT returns
                   are sent
           3.     Date of VAT registration
           4.     Final month when last VAT return was submitted
           5.     Box 5 figure (tax payable or repayable) on the last return
                   (tip – don’t enter negative figure if the period produced a repayment)

Failure to register

HMRC have indicated they will take a soft touch approach to those businesses who do not register in good time, at least in the initial stages.

If you are at all fazed by the process by all means contact us and we will handle all the online registration formalities for you.

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DISCLAIMER - PLEASE NOTE: The ideas shared with you in this email are intended to inform rather than advise.Taxpayers circumstances do vary and if you feel that tax strategies we have outlined may be beneficial it is important that you contact us before implementation. If you do or do not take action as a result of reading this newsletter, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.