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You have until 31 May to benefit from the latest tax amnesty

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20 April 2011

Plumbers are the latest group to be offered tax incentives to tidy up their tax affairs. But the benefits of this opportunity can apply to any taxpayer who has not paid the right amount of tax.

In March HMRC announced a new disclosure facility for plumbers, gas fitters, heating engineers and others in associated trades that have not paid the right amount of tax. Under the Plumbers’ Tax Safe Plan (PTSP) individuals and companies who come forward and disclose tax errors will face lower penalties than would otherwise be the case.

Those working in the plumbing industry that do not come forward under the PTSP are being warned that if HMRC later finds tax errors they will come down hard on them. Facing penalties of up to 100% of the tax underpaid and possibly even criminal charges. As with previous amnesties HMRC has used its extensive information powers to obtain details about those working in the plumbing industry and will begin targeted enquiries once the amnesty is over.

Key details about the PTSP

  • An intention to make a PTSP disclosure must be submitted to HMRC by 31 May 2011.
  • Full disclosure and payment must be submitted to HMRC by 31 August 2011 (although in certain situations you may be able to arrange to spread your payments).
  • Penalties will be limited to 20%, but could be 10% if the error was just careless or nil if the mistake occurred even though you took reasonable care.
  • If a disclosure is not made under the PTSP and tax errors have been concealed you could face penalties of as much as 100%.
  • The number of tax years to be included in the disclosure depends on the behaviour that caused the tax errors. If reasonable care had been taken - four years, if the error was careless - six years and if it was a deliberate error - 20 years.
  • HMRC has advised that any taxpayer, even if they are not involved in the plumbing industry, can make a disclosure and expect similar terms to the PTSP.

What next?
If you potentially have a disclosure to make you should consider the benefits of this opportunity. More information can be found on the HMRC website (link to: http://www.hmrc.gov.uk/trades-disclosure/index.htm)

Is this the best disclosure opportunity available?
For most people it will be, but if you have foreign investments or assets you may be better off using the Liechtenstein Disclosure Facility. This is available until 31 March 2015 and more information can be found on the HMRC website (link to: http://www.hmrc.gov.uk/disclosure/liechtenstein-disclosure.htm)

Hazlewoods can help
Although the PTSP looks straight you could easily find yourself paying higher penalties than you need to. Speak to your usual Hazlewoods contact or email ruth.dooley@hazlewoods.co.uk to ensure you benefit fully from these disclosure opportunities.

You must act now to meet the 31 May deadline.