Tutors and teachers face tough tax exams
Teachers, coaches and private tutors are the next group of individuals to have the tax spotlight turned on them.
HMRC's latest campaign has targeted anyone who has income from providing private and/or self employed tuition and coaching as a main or secondary income, regardless of whether they have a recognised qualification.
They have warned that anyone who has not paid the correct tax on these earnings because they have not told HMRC about it, has until January 6 2012 to tell HMRC of their intention of making a disclosure.
HMRC says that making a disclosure under the Tax Catch Up Plan before that date means 'you will benefit from the best possible terms'.
HMRC backed its warning with veiled threats to carry out detailed investigations. It said: "HMRC is using legal powers to obtain information about payments made to tutors and coaches from various sources, including the academic, sport, leisure and other sectors.
"After January 6 2012, when the deadline to notify has passed, HMRC will use data from an extensive range of sources to identify those who have failed to come forward and notify their intent to make a full declaration. HMRC uses advanced IT tools such as 'web robot' software which helps identify people who have failed to pay the right tax. Those identified face substantial penalties or even criminal prosecution.
"HMRC carries out criminal investigations into any customers whose circumstances meet the criteria within HMRC criminal investigation policy and when this leads to prosecution HMRC will seek the maximum publicity to discourage others from failing to pay the right tax on time. HMRC does not believe that it is fair for the compliant majority to pay for those who cheat their taxes."
Could do better
Professional tax body, the Chartered Institute of Taxation (CIOT) felt that this latest campaign warranted a pass mark, but said that the taxman 'could do better' in this area.
CIOT's Gary Ashford said: "HMRC's targeting of another class of taxpayers comes as no surprise, given the Government's high profile target of bringing in an extra £7 billion through initiatives to tackle tax avoidance, evasion and fraud by the end of the Parliament. They are right to highlight an opportunity like this but we think they need to make this possibility open to all.
"HMRC have a range of sources of evidence available to them and we assume that they have been doing their homework so they can target their anti-evasion efforts.
"Tutors who think they might not be on top of their (tax) forms will need to study this hard and make sure they get their sums right or they may find they are being taught a lesson by the taxman.