The Solicitors’ Tax Campaign has recently been launched by HM Revenue & Customs, inviting legal specialists to voluntarily disclose income and liabilities.
This is the latest campaign since the scheme was launched back in 2011, with previous efforts targeting healthcare workers and many others. According to HMRC, the campaigns have secured nearly £1bn up to now. Solicitors who work in a law firm or are self employed, as well as those who operate within a partnership, are being targeted.
HMRC’s head of campaigns, Caroline Addison, states that the organisation has uncovered sufficient evidence to pursue solicitors for tax that is owed. The data has been secured through third parties, legal aid information and other sources to reveal evidence of evasion.
Addison says the evidence indicates that some solicitors believe they can operate without declaring liability and paying the taxes due. By registering for the solicitors’ campaign voluntarily, members of the legal profession will benefit from lower penalties and interest. As a warning to those who decide not to come forward, Addison said:
“Those who make a deliberate decision not to pay the taxes due could face a penalty of 100 per cent or more of the tax due, or even a criminal prosecution.”
The campaign gives solicitors until June next year to come forward and pay the tax due on undisclosed income. Addison adds that it is cheaper and easier for solicitors to register for the campaign, rather than have HMRC catch up with them.
When does the campaign run, and who needs to come forward?
The campaign began on 8th December 2014 and will end on 9th June 2015. Only those solicitors who have previously undisclosed income or gains need to come forward and take advantage of the campaign. If you are a solicitor and you have disclosed all taxable income to HMRC, you don’t need to register.
How does the campaign work?
If you have undisclosed income and want to come clean, register with the campaign by 9th March 2015. Your disclosure and payment should be made by 9th June 2015. If you comply with the campaign’s time lines, you will be charged a lower penalty than if HMRC discovers you haven’t paid sufficient tax.
You might be able to spread the payment of tax owed instead of having to pay a lump sum. If you have managed to make a mistake and carelessness is the reason for not paying sufficient tax, you will only have to pay up to six years, rather than up to 20.
Do you believe that people are likely to use HMRC’s campaigns, and if so, why? If you are considering voluntary disclosure and need advice, contact the experts at The Accountancy Partnership.
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