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Doctors told to declare all income or risk investigation and high penalties

BMJ 2010; 340 doi: https://doi.org/10.1136/bmj.c193 (Published 12 January 2010) Cite this as: BMJ 2010;340:c193
  1. Zosia Kmietowicz
  1. 1London

    Doctors in the United Kingdom who have not declared some of their earnings have until the end of March to register with the tax office or risk investigation, public shaming, high penalties, and public prosecution.

    HM Revenue and Customs is offering doctors a tax amnesty called the “tax health plan” in which they have until 31 March to make disclosures of money earnt outside their main employment. They then have until 30 June to make arrangements to pay the tax due plus gains on the unpaid tax along with interest on the tax and a penalty of 10%.

    Those who fail to come forward by the end of March face the threat of investigation and a penalty of 100% of the tax due.

    Mike Wells, director of risk and intelligence at HM Revenue and Customs, said, “Our aim is to make it as easy as possible for people to come forward, make a full disclosure, and benefit from the certainty of a reduced 10% penalty that HMRC is making available to those who qualify for this opportunity.

    “From April we will be using the information at our disposal to investigate medical professionals who have not declared their full income. I therefore strongly urge any in this group who think they may have outstanding tax liabilities on their income to get in touch with HMRC and get their tax affairs in order simply and on the best available terms.”

    The campaign to recoup unpaid tax is focusing on all professionals but is starting with the medical profession because of evidence of underpayment of tax from this sector.

    Mr Wells concluded, “This is the first step in enabling those with undisclosed income or gains to avoid a full tax investigation together with much higher penalties. The message is clear: contact us before we contact you.”

    Phil Berwick, director of tax investigations at the leading commercial law firm and tax investigation specialists McGrigors, said, “HMRC often targets its compliance work at specific sectors, but to do so in the form of a tax amnesty aimed solely at the medical profession is without precedent.

    “Compliance activity is usually costly and time consuming for HMRC. By offering an amnesty HMRC is hoping to get a significant amount of tax into the Treasury’s coffers very quickly and at a reduced cost to itself. The parlous state of the public finances and the pressing need to reduce the deficit has probably forced HMRC’s hand to an extent.”

    Questions and answers, prepared by HM Revenue and Customs

    Why is this campaign beginning with doctors?
    • Part of the HMRC approach is to run campaigns that address the areas where intelligence tells us there is a significant risk of underpayment.

    • HMRC has research and intelligence that tells the department that there is a substantial risk associated with professionals either under-declaring or not declaring their income.

    • HMRC has particular information and intelligence related to medical professionals, and it makes sense to start this campaign with them.

    What if people don’t comply?
    • Coming forward and using the opportunity to put things right will be the best way to put your affairs in order.

    • Except in the most extreme cases, HMRC is unlikely to begin a criminal investigation where a full disclosure is made and the amount due paid.

    • HMRC will be using its intelligence and information to follow-up and contact those it thinks should have used the opportunity and will assume that by not coming forward they do not want to comply. That will mean at least a higher penalty and could also mean prosecution.

    When is all this starting, and how will anyone know about it?
    • You can contact HMRC from 11 January.

    • HMRC has discussed its campaign with the GMC and the main professional representative bodies and made information available.

    • It has also contacted the main medical media outlets and is publishing details on its website.

    How to make a declaration or find out more
    • Call HMRC on tel 0845 600 4508 with details such as name, address, national insurance number, and GMC registration number, or

    • Use the e-form link at www.hmrc.gov.uk/tax-health-plan/.

    Notes

    Cite this as: BMJ 2010;340:c193

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