Question: Can HMRC’s Tax Health Plan help my business?

David Hill of TaxTroubleshooter.co.uk replies:

A: Someone at the Revenue clearly has a sense of humour. Despite the name, the new Tax Health Plan (THP) is not a wonderful scheme to help businesses through difficult times.

In fact the THP is the first of a series of limited amnesty-style programs targeted at specific industries or sectors and intended to bring in previously undeclared tax quickly. The HMRC homepage for the Plan is at http://www.hmrc.gov.uk/tax-health-plan/.

The THP is exclusively for health professionals who have undeclared income and it is an invitation for them to come forward with a disclosure and payment. As with the recent New Disclosure Opportunity (NDO), most people making a qualifying disclosure will pay only a 10% penalty on top of the tax and interest due.

Where an innocent error has been made, the taxman only requires a maximum of six years’ tax and interest and will not require a penalty at all.

If the carrot is the low penalty, the stick is that HMRC has amassed significant information on non-payroll payments to medical professionals in the UK and will demand much higher penalties on those who are found out after the THP has closed.

In what is now a well-established framework, HMRC requires a notification by March 31, 2010 followed by a disclosure using standard forms, accompanied by full payment, by 30 June 2010.

Some disclosures will be picked up for enquiry but the vast majority will simply be accepted some time after the disclosure deadline.

Any medical professionals who suspect they have received untaxed income which has not been declared should talk to their tax advisor or accountant urgently.