Tax: Consultants & GPs

You may know that I specialise in advising top medical professionals, this is a message aimed at them, but equally the message about declaring income accurately to HMRC should be heeded by all.

In January the Inland Revenue (HMRC) provided a tax amnesty aimed at members of the medical profession with a focus on high earning consultants and GPs. As you may already know as a GP or Consultant you have a higher than average chance of being investigated by HMRC - not a pleasant experience!

HMRC launched the 'Tax Health Plan' (THP) in which they offer a reduced penalty of 10% for those who came forward with details of unpaid tax liabilities.This is the penalty on top of the income tax that also needs to be paid.

The amnesty deadline came to and end at the end of June 2010. It is estimated that there are about 28,500 GPs, dentists and health professionals that HMRC believe may have undeclared earnings. To date approximately 1,500 (5%)have applied to enter into the scheme declaring a total of £9 million of untaxed income. So that's an average of £6,000 of undeclared income per person.

The official channels to declare under the scheme are now closed. However HMRC has stated that it will still accept disclosures throughout August until 1 September 2010. These disclosures will not benefit from the 10% guaranteed penalty under the original plan, but it is expected to be less than the usual 40% plus under an investigation.

Don't forget that as we are now in a 50% income tax regime, ensuring that you have declared income correctly is highly important. Make sure that your Accountant is on the ball. We are in an age where HMRC is fairly sanguine about collection of taxes!