 New plumbers tax amnesty – not just for plumbers
01 March 2011: PKF Accountants & business advisers, welcomes the new tax amnesty aimed at plumbers – the PLUMBERS TAX SAFE PLAN (PTSP) – but note that it is apparently open to anyone who has not fully disclosed their income in the past.
John Cassidy, tax investigation and dispute resolution partner at PKF, comments: “The taxman has offered specific tax amnesties in the past but, despite its name, the way this one is worded seems very wide: it offers ‘very similar terms’ to anyone who wants to make a full tax disclosure, whether they use the standard PTSP forms or not. The PTSP may not be billed as a general tax amnesty for all UK residents but, based on today’s announcement, this seems to be very close to offering a general amnesty by the back door.”
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: “HMRC’s record of publicising past amnesties has not been great, so I hope it will focus its publicity for the PTSP where plumbers go: posters at builders’ and plumbers’ merchants would be a good start. And if HMRC is really prepared to offer these favourable terms to UK taxpayers more widely, it ought to promote this very heavily nationwide.”
The PTSP is the fifth tax amnesty offered to UK residents. In the past HMRC has offered tax amnesties to offshore account holders and doctors and dentists among others. Individuals who had the opportunity to use a previous amnesty: offshore account holders before 4 January 2010 and doctors and dentists practicing before 31 March 2010, are barred from using the PTSP. However, in many circumstances, such account holders may be able to take advantage of the current Liechtenstein Disclosure Facility (LDF) even if they do not currently have a financial presence in Liechtenstein.
John Cassidy says: “This is not a total amnesty, it will cost business owners money to use the PTSP and bring their tax affairs up to date. However, if you need to put things right, there is no doubt that this is a very good deal – the bill will still be hugely cheaper than the one HMRC would send you if it catches you cheating on your taxes.”
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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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