Simon Littlejohns, Partner and Head of Tax at Friend Partnership Limited, discusses the importance of looking at your tax affairs.
Solicitors in the West Midlands, and indeed the rest of the UK, need to be looking at their tax affairs.
HMRC have launched their latest tax gathering initiative which is aimed at solicitors who have not been paying enough attention to their tax affairs.
It is the latest voluntary disclosure opportunity for a specific group of taxpayers to get their tax affairs in order on the best terms available.
Medical professionals, plumbers, tutors and coaches, electricians, online traders, landlords and health professionals have been the targets for previous campaigns. The approach has so far netted almost £1bn from voluntary disclosures and follow-up activity by HMRC.
Solicitors have until 9 March 2015 to tell HMRC that they would like to take part in the campaign, and until 9 June 2015 to disclose the tax they owe and pay it. HMRC have indicated that there are more than 7,400 solicitors – around 6% of the UK total – in the West Midlands.
If solicitors come forward voluntarily, any penalties they might have to pay will be lower than if HMRC has to approach them first.
HMRC have commented as follows:
“Information gathered by HMRC has allowed us to identify solicitors who thought they could operate without declaring income and paying the taxes that others have to pay.
If you have not declared all of your income, you need to put your tax affairs in order. Take this chance to come forward and put things right in a straightforward way and on the best possible terms. It will be easier and cheaper for you to come to us than for us to come to you.
Those who make a deliberate decision not to pay the taxes due could face a penalty of 100% or more of the tax due, or even a criminal prosecution.”
Solicitors who make a full disclosure of tax owed will be offered a simple and straightforward way to put their tax affairs right, and will avoid paying a higher penalty. The penalty would normally be between 0% and 20% depending on the circumstances.
Solicitors who do not come forward but are found to have unpaid tax liabilities will face higher penalties, rising to 100% of the tax unpaid or, possibly, criminal investigation. Penalties for offshore-related income can be up to 200%.
This is a one-off opportunity for those at risk to get their affairs up to date secure in the knowledge that the penalties will be much reduced. Solicitors at risk should act quickly. Please contact Simon Littlejohns if you want help with this matter.
Tel: 0121 633 2014