HMRC targets Health Sector – who will be next?

HM Revenue & Customs (HMRC) has announced a new Tax Health Plan (THP) aimed at encouraging medical professionals to disclose all previously undeclared income in return for a reduced penalty.

HMRC has obtained information from various sources including NHS trusts, private hospitals and medical insurers and is now in a position to match that information against the returns of income made by medical professionals.

As a result they are looking for Hospital Consultants to disclose previously undeclared commission and formal notices have already been issued to BUPA, Sun Life and other institutions to obtain details of commissions.  It is understood that HMRC have already identified more than 800 potential enquiry cases.

The Tax Health Plan offers the opportunity to make a full disclosure and settle any outstanding liabilities in return for a reduced fixed penalty of 10%. To take advantage of this, notification must be made by 31 March 2010 with the disclosure itself then to be made by 30 June 2010 on the forms available from the HMRC website.

Chris Bowker, tax partner at chartered accountants and business advisers Simpkins Edwards said: “We have seen similar announcements by HMRC over the last couple of years, the most recent of which concerned the disclosure of offshore bank accounts at the end of 2009, but this is the first time HMRC has used its new information powers to target a specific sector.

“We have to assume that because HMRC can use their new information powers to obtain huge amounts of data from third parties about individuals’ tax affairs, other sectors will follow.”

Mr. Bowker added that while the processes for notification and disclosure are straightforward, the tax calculations are very complex.  Anyone, who needs to make a disclosure or thinks they may be targeted in the future, should take urgent professional advice.