Tax disclosure deals for all, suggests the CIOT

A professional tax body has suggested the recent scheme by HM Revenue and Customs (HMRC) to offer a 'disclosure opportunity' for medical professionals would logically be extended to all taxpayers as a matter of fairness.

Under the new Tax Health Plan (THP), eligible people can disclose their arrears and then settle their tax affairs with only a 10 per cent penalty rather than a penalty that might reach 100 per cent.

Gary Ashford, chair of the Chartered Institute of Taxation (CIOT) management of taxes committee said: "Whilst we welcome HMRC encouraging people to get their tax affairs in order, there is a measure of unfairness in offering a deal to one sector of the population and not to others. Surely it would be better to have a general arrangement available to all and a concerted effort by HMRC to get their message over?"

The CIOT has concerns that the way HMRC is offering different disclosure facilities to various groups with short time windows is not ideal. It will also make others who wish to get their tax arrears in order wonder whether they should wait for 'their' opportunity.

Gary Ashford said: "It would be sensible to consider a genuine one off disclosure for everyone. And one that lasts sufficiently long and is sufficiently attractive to get people to come forward. This could enable them to clean the slate before the advent of the harsher 'Naming and Shaming' rules that come in from April 2010."

Health

The current THP is open to medical professionals with tax irregularities arising from undeclared earned income. HMRC has obtained information about payments to medical professionals from NHS Trusts, private hospitals and medical health insurance companies. It requires a medical professional who wishes to take advantage of the disclosure opportunity to disclose by notifying HMRC of their intention to make a disclosure by March 31 2010 and then disclosing by June 30 2010.

Those taking advantage of the THP will have to pay the tax involved together with interest, but will only face a 10 per cent penalty, instead of the potential 100 per cent penalty that could be applied.

This is in line with the various offshore disclosure offers HMRC have recently made.

It is expected that HMRC will target other professional groups in the future with similar arrangements.