 Make the tax amnesty pay for everyone
14 March 2011: PKF Accountants & business advisers, is urging the Chancellor to announce in the Budget that he is opening up the latest tax amnesty – the PLUMBERS TAX SAFE PLAN (PTSP) – to anyone who has not fully disclosed their income in the past as a way to raise revenue.
John Cassidy, tax investigation and dispute resolution partner at PKF, comments: “The taxman has offered specific tax amnesties in the past but, although being cost effective for HMRC to operate, they have had little overall impact on Treasury tax receipts. The PTSP already offers ‘very similar terms’, to anyone who wants to make a full tax disclosure but HMRC officials seem keen to play this down. If this was properly advertised and promoted as a general tax amnesty, the Government could collect some of the extra revenue it needs without having to put up tax rates for everyone else.”
Plumbers and others who want to use the PTSP to come clean on past tax arrears must register for the scheme by 31 May and will need to pay any back taxes plus interest and penalties by 31 August. The tax penalty rate to be paid will depend on individuals’ circumstances. Where individuals have underpaid tax because of making careless mistakes with their tax returns or have forgotten to tell HM Revenue & Customs (HMRC) that they have started up in business, tax penalties will be limited to between zero and 10% of the tax due - cheaper than the 30% penalty that could otherwise be charged in such situations. Where individuals have deliberately understated their income or not told HMRC that they have started trading, tax penalties will be limited to 20% - a bit more expensive than previous amnesties, but still much cheaper than the penalties of up to 70% that can otherwise be charged if HMRC catches you out.
John Cassidy says: “To make the amnesty really work for all taxpayers, the Chancellor should also extend the registration and disclosure deadlines by six months to give more time for the message to get through to everyone who needs to bring their taxes up to date.”
“Having a tax amnesty may seem like a let-off for those who have not been honest about their taxes, but if it raises cash that can be used to protect services, or even reinvested in clamping down harder on serious tax fraud in the future, I think most people would support it.”
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For further information, please contact:
Graham Yeatman, on 020 7065 0409, graham.yeatman@uk.pkf.com
Notes to Editors:
1. PKF (UK) LLP is a leading firm of accountants and business advisers with more than 1,500 partners and staff operating in 23 offices in the UK mainland firm, incorporating a wholly-owned financial planning company and associated offshore practices. The firm specialises in advising growing and entrepreneurial/owner-managed businesses, AIM and fully listed companies, and also has extensive experience in the public and not-for-profit sectors. Principal services include assurance and advisory; taxation; consultancy; corporate recovery and insolvency; corporate finance and forensic. The firm has particular expertise in advising sectors such as hotels and leisure; mining and resource; public sector; real estate and construction; professional practices; not-for-profit; and medical. The firm’s web site is www.pkf.co.uk
2. PKF (UK) LLP also offers financial services through its FSA authorised company, PKF Financial Planning Limited. PKF (Isle of Man) LLC is a limited liability company registered in the Isle of Man. PKF (Guernsey) Limited is incorporated in Guernsey.
3. PKF (UK) LLP is a member firm of the PKF International Limited network of legally independent firms. The PKF International Limited network has around 17,600 people operating in 120 countries around the world.
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