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Tax Health Plan has medical pros in sights

19 January 2010

Following the disclosure facility offered to offshore bank account holders, medical professionals are the next group HM Revenue & Customs (HMRC) has in its sights.

HMRC have introduced the Tax Health Plan, an opportunity for medical professionals to disclose income on which tax has not yet been paid to HMRC in return for a lower penalty.

Medical professionals are the first group to be targeted in a series of HMRC ‘carrot and stick’ initiatives aimed at the professions.

The ‘carrot’ offered by HMRC for disclosing under the Tax Health Plan is that the penalty payable on the previously undisclosed income will be fixed at 10% of the tax due, unless the undisclosed income is less than £1,000. in which case there will be no penalty at all.

The ‘stick’ is that if no disclosure is made by 31 March 2010, HMRC will investigate the information already held on payments from NHS, private hospitals and medical insurers, and use its powers to obtain detailed information about any other payments made.

Where HMRC discovers a mismatch, the penalties it will seek will be unlikely to be lower than 30%, and could be up to 100%, of the unpaid liabilities.

There are two key deadlines under the Tax Health Plan:

Whilst initially this disclosure opportunity was limited to those registered with the General Medical Council, HMRC is now considering whether to widen this to include dentists. HMRC also says it has plans to provide similar opportunities for other health professionals in the future.

Any medical professionals coming within the ambit of the Tax Health Plan should seek immediate specialist tax advice to determine whether they should take advantage of this disclosure opportunity.

Professionals in other areas can expect to be subject to similar increased scrutiny in the future as HMRC increases its efforts to clamp down on what it perceives as ‘tax avoidance’ and comes under increasing pressure to do what it can to improve the Government’s finances.

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