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Disclosure schemes: Tutors & coaches next

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17th Oct 2011
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The taxman has started a campaign to target private tutors and coaches who owe tax.

The campaign, revealed by AccountingWEB in June, will include personal fitness trainers, academic tutors and dance coaches, regardless of whether they have a teaching qualification.

HMRC said its campaign is aimed at people who use tuition and coaching, as a main or secondary income and who haven’t paid tax on the income.

Tutors and coaches have until 31 March 2012 to come forward and tell HMRC about their outstanding tax for the years up to 5 April 2010, and pay what they owe. The plan makes it easy for customers to put their tax affairs right and keep them on the right track in the future.

People who come forward by the deadline are more likely to receive more lenient penalties – probably no more than 20 per cent of unpaid tax.

Those who wait for HMRC to come to them will find that they have to pay much higher penalties, or even face criminal prosecution.

Marian Wilson, HMRC’s head of campaigns, said: “We are using various intelligence sources to identify and then target those who do not take advantage of this opportunity to declare their full income. The message is clear: contact us before we contact you.”

TAXtv presenter Giles Mooney said HMRC's campaign against tax evasion by private tutors was "curious" because the tax investigators might struggle to find evidence of tax evasion if private tutors don't come clean about undeclared income. Previous HMRC campaigns have targeted professions such as doctors or dentists who have professional bodies -- making it easy for the taxman to access information on professionals and cross-reference information against its own tax records for potential disparities between income and tax paid. "I struggle to see the logic of HMRC's private tutor campaign. What does HMRC do if people don't come forward?" Mooney said.

He said that freelance tutors who work a couple of days at a college, rather than, say, someone earning £20 an hour for tutoring a schoolchild with their maths, may be the main target of HMRC's private tutor campaign. Tax officials could check college payroll data against their own records for inconsistencies, Mooney said.

Which profession will HMRC target next? Mooney said he'd heard rumours that lawyers and accountants could be next in line. "HMRC already knows how many clients an accountant has and has an idea on fee structures, the Revenue's computer could easily check to see if an accountant's declared revenue was lower than expected."

Gary Ashford, who represents the Chartered Institute of Taxation on HMRC’s Compliance Reform Forum, said: “HMRC’s targeting of another class of taxpayers comes as no surprise, given the Government’s high profile target of bringing in an extra £7 billion through initiatives to tackle tax avoidance, evasion and fraud by the end of the Parliament. They are right to highlight an opportunity like this but we think they need to make this possibility open to all.

The “Tax Catch up Plan” has two stages:

  • From 10 October 2011 to 6 January 2012, tutors/coaches/instructors must register with HMRC to “notify” that they plan to make a voluntary tax disclosure
  • By 31 March 2012 those who have registered to notify must tell HMRC what they owe and pay the tax, interest and penalties due

People can register online by filling in a “notification form” or by calling HMRC on 0845 601 8817.

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Replies (6)

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By johnjenkins
17th Oct 2011 15:09

We all know how this will end up.

Money spent on chasing £2m. Income £500k - classic. Meanwhile disruption, etc.etc.

I'm not against going for tax evaders but if the lower end of the pecking order don't have a few perks then what we have seen in a few cities against capitalism will escalate widely and quickly.

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By carnmores
17th Oct 2011 18:28

given the last comment

do we know how much each of these disclousure schems have cost and brought in? if not then can we find out

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By taxbakbristol
17th Oct 2011 19:42

Cost of Gimmick Schemes

How many more of these schemes will HMR&C come up with? Who dreams them up? I am against tax evasion but I have small self employed businesses and limited companies going out of business because HMR&C have not paid CIS refunds due as of today after 5 months....

I would rather they spent OUR money getting the basics right  answering letters , paying back tax they owe ....not costing us money on GIMMICKS!

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By Marion Hayes
17th Oct 2011 22:25

education institutions

Following many PAYE audit attacks on Local Authority and University payrolls it is almost impossible to get paid without the operation of PAYE if you are lecturing, supply teaching or coaching.

To my mind the best you can be looking for is the uplift to higher rates.

This also covers most of the sports tutors operating on ay scale through the local authority or leaisure centres.

Private tutoring in most areas is coaching children, and often by other schoolchildren or college students so there is little tax risk.

Why is this deemed a high yield area - I thought that they were tasked with targeting high profile or high yield  on cost/profit ratios.

 

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By The Innkeeper
18th Oct 2011 11:05

why

in your third paragraph of the main article use the Revenue term 'Customer' We are not customers but taxpayers. Customers have a choice of where they go we do not. Please stop pandering to the Revenue in the use of wrong nomenclature.

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By carnmores
18th Oct 2011 14:22

now i know the meaning of

inn disposed ;-)

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