The taxman is out to get people who have been earning money as private tutors or coaches without declaring the income. HMRC have obtained information from a number of sources. However, before actively investigating the tutors, coaches and instructors they are first of all for giving them an opportunity to come forward – and make voluntary disclosures on simple and favourable terms.
This is the latest in an ongoing series of simplified disclosure programmes launched by HM Revenue and Customs. Previous campaigns targeted, medical professionals, plumbers and gas fitters, and businesses trading above the VAT threshold but who had not registered for VAT.
This latest programme is called The Tax Catch up Plan. It is aimed at anyone, regardless of qualification, providing private lessons, and who has not declared the full amount of income already. This includes people whose source of income is their main job and also those who do it on a part-time basis. The Tax Catch up Plan will cover private tuition, instruction or coaching: e.g. tutoring traditional academic subjects, fitness and lifestyle coaches, dance teachers, musical instrument tuition such as piano teachers, art tutors, evening class teachers, etc.
Coaches and tutors have to register (or “notify”) with HMRC’s Tax Catch up Plan their intention to make a voluntary tax disclosure by 6th January 2012. Then they have until 31st March 2012 to make their full disclosure and also to the pay the full back taxes, interest and penalties. The disclosure has to cover all outstanding tax for tax years up to and including 5th April 2010.
The Taxman says that those who come forward by the deadlines will benefit from reduced penalties, which is likely to be no more than 20% of the unpaid tax. Those who don’t come forward and are subsequently investigated could face much higher penalties (up to 100% of the tax evaded), or even criminal prosecution.
After 31st March, the taxman says he will: “use various intelligence sources to identify and then target those who do not take advantage of this opportunity”.
How can Lynam Tax Investigation Experts help me?
Lynam Tax partners have a vast amount of practical experience in managing tax investigations and tax enquiries. We can advise you on the best course of action and if appropriate, help you manage any necessary disclosures, in order to obtain the optimum outcome for you, your business and your family.
*For a free, private, no obligation consultation, call Paul or Gemma Lynam today on 0845 643 9997