Tax Health Plan - yet another Disclosure Opportunity for Advisers to consider?

HM Revenue & Customs (HMRC) have announced yet another opportunity for errant taxpayers to disclose their wrongdoings.  This one though is just for medical professionals and is called the Tax Health Plan (THP). 

Medical professionals have until 31 March 2010 to register their intention to disclose with HMRC and then until 30 June 2010 to complete their disclosure and pay the outstanding tax.  After this, HMRC say they will look to investigate those that they think have understated their income.  It all suggests that they have some pretty concrete information which they are relying on to make their point, in what the HMRC is referring to as the Professionals Campaign.

This latest initiative is announced just one week after the time limit closed on the New Disclosure Opportunity (NDO), which the HMRC described as the absolute last chance to come clean for those with an offshore account or asset and tax to pay. Thrown in the middle of all this is the Liechtenstein Disclosure Facility (LDF), aimed at people with or acquiring assets in Liechtenstein.  Within a week of the initial THP announcement, the plan is now to include dentists.  HMRC have stated that “we already have plans to provide similar opportunities to other professional groups, including other health professionals soon.”

Why was this disclosure opportunity offered? 

HMRC have been able to use their information gathering powers to obtain bulk information on certain types of income paid to healthcare professionals.  It is likely they have contacted NHS Trusts, Private Hospitals and Medical Insurers as well as gathering further income details relating to:

1. Private medical work;
2. Medicals for insurance applications and claims;
3. Vaccinations, flu jabs and similar issues;
4. Call out, cover and locum type work;
5. Payments for types or groups of patients on register – e.g. the elderly, children etc.

A sample check of this information has probably revealed that a number of medical professionals have failed to make a full account of their income.  As with previous initiatives, HMRC believe it is more cost effective to encourage wrongdoers to disclose “voluntarily”.

Word of caution

For any medical professional coming forward now under this new initiative, who had the chance to disclose under any previous initiative but didn’t, will not be able to settle with a favourable 10% penalty.  So on the face of it, if the undeclared income has been put offshore or relates to income generated overseas, this disclosure for medical professionals does not seem very advantageous.

We would always encourage taxpayers to make a full disclosure but it has to be well thought through first. It is possible that someone with a problem may also be able to disclose under the LDF with far more favourable terms to settle.  So any doctor or dentist with something to account for should seek the help of a professional tax adviser first, before deciding on any particular course of action.

Also, having obtained all of this information HMRC will want to investigate those who didn’t take the chance to come clean.  That will inevitably carry a higher penalty and in some cases the possibility of a prosecution.

How can we help?

Here at BTG Tax we will listen to your situation and advise on the best course of action.

Please contact one of our tax investigation specialists on 0845 678 2903 quoting reference “THP” to discuss, in confidence, how we can provide a solution for your particular situation.

Alternatively, to contact us directly through the website, please click here and we will get back to you promptly.

Key THP contacts:

John O'Donnell for Scotland, Alex Clarke for the North, Paul Malin for the Midlands and Wales, Andrew Walker for Northern Ireland and for the south, Sue Bradshaw.

We will update this page as the THP develops so please return for the latest news.