Tax return initiative brings the tax system into ‘further disrepute’, says Lakshmi Narain
HMRC reminded electricians who notified their intention to disclose unpaid tax liabilities under the Electricians Tax Safe Plan to make their disclosure and pay what they owe by 14 August.
Under the plan electricians can receive penalties of only 10%, HMRC said. ‘The campaign is aimed at anyone who installs, maintains and tests electrical systems, equipment and appliances – and covers any tax owed, for whatever reason.’
Marian Wilson, Head of HMRC Campaigns, said: ‘Once the disclosure opportunity closes on 14 August, electricians who have not come forward but are found to have unpaid tax liabilities will face higher penalties, rising to 100% of the tax evaded or, possibly, even criminal prosecution.’
HMRC campaigns have collected nearly £510m so far, and more than £120m from ‘HMRC follow-ups’ including over 18,000 completed investigations. ‘There are also 23 criminal cases under way. Two plumbers have been jailed and another received a suspended prison sentence,’ HMRC added.
‘Never ending series of amnesties’
The ‘Tax Return Initiative’ announced last month prompted tax professionals to back the Commons Treasury Committee’s call for HMRC to consider a general disclosure facility open to all taxpayers.
Last week Lakshmi Narain, Technical Director at Baker Tilly, said it was not easy to understand the basis for the latest ‘amnesty’, in respect of outstanding tax returns.
Writing in Tax Journal, Narain said: ‘HMRC clearly knew the identity of the taxpayers. However by leaving it to the individuals to make any disclosure to HMRC, and as a result to suffer no more than never knowingly undersold penalties, the individuals in question could find themselves better off than others who have filed late but suffered a tougher penalty. This brings the tax system into further disrepute.’
Narain argued that instead of encouraging compliance, the ‘never ending series of amnesties’ might persuade some taxpayers to ‘hang on for just another week/month/year in case the next amnesty has got their name on it’.
He added: ‘Anyone who has not yet come forward despite multiple opportunities of getting a soft settlement is very unlikely to be attracted by yet another amnesty. It’s not just that they might be hanging on until an amnesty tailored for them: the hardcore who have not yet taken the chance to wipe the slate clean are arguably tax evaders by mindset.’
There was a case for ‘one last, general disclosure facility’, he said.
However, in the same Tax Journal feature Jason Collins, Head of Tax at Pinsent Masons, suggested that HMRC should consider introducing ‘a general amnesty for legacy planning, involving a “split the difference” deal’.
Tax return initiative brings the tax system into ‘further disrepute’, says Lakshmi Narain
HMRC reminded electricians who notified their intention to disclose unpaid tax liabilities under the Electricians Tax Safe Plan to make their disclosure and pay what they owe by 14 August.
Under the plan electricians can receive penalties of only 10%, HMRC said. ‘The campaign is aimed at anyone who installs, maintains and tests electrical systems, equipment and appliances – and covers any tax owed, for whatever reason.’
Marian Wilson, Head of HMRC Campaigns, said: ‘Once the disclosure opportunity closes on 14 August, electricians who have not come forward but are found to have unpaid tax liabilities will face higher penalties, rising to 100% of the tax evaded or, possibly, even criminal prosecution.’
HMRC campaigns have collected nearly £510m so far, and more than £120m from ‘HMRC follow-ups’ including over 18,000 completed investigations. ‘There are also 23 criminal cases under way. Two plumbers have been jailed and another received a suspended prison sentence,’ HMRC added.
‘Never ending series of amnesties’
The ‘Tax Return Initiative’ announced last month prompted tax professionals to back the Commons Treasury Committee’s call for HMRC to consider a general disclosure facility open to all taxpayers.
Last week Lakshmi Narain, Technical Director at Baker Tilly, said it was not easy to understand the basis for the latest ‘amnesty’, in respect of outstanding tax returns.
Writing in Tax Journal, Narain said: ‘HMRC clearly knew the identity of the taxpayers. However by leaving it to the individuals to make any disclosure to HMRC, and as a result to suffer no more than never knowingly undersold penalties, the individuals in question could find themselves better off than others who have filed late but suffered a tougher penalty. This brings the tax system into further disrepute.’
Narain argued that instead of encouraging compliance, the ‘never ending series of amnesties’ might persuade some taxpayers to ‘hang on for just another week/month/year in case the next amnesty has got their name on it’.
He added: ‘Anyone who has not yet come forward despite multiple opportunities of getting a soft settlement is very unlikely to be attracted by yet another amnesty. It’s not just that they might be hanging on until an amnesty tailored for them: the hardcore who have not yet taken the chance to wipe the slate clean are arguably tax evaders by mindset.’
There was a case for ‘one last, general disclosure facility’, he said.
However, in the same Tax Journal feature Jason Collins, Head of Tax at Pinsent Masons, suggested that HMRC should consider introducing ‘a general amnesty for legacy planning, involving a “split the difference” deal’.
