Extend tax amesty schemes to all taxpayers | AccountingWEB

Extend tax amesty schemes to all taxpayers

John Cassidy, tax investigation and dispute resolution partner at PKF, this week urged the Chancellor to open up the latest tax amnesty – the Plumbers Tax Safe Plan – to anyone who has not fully disclosed their income in the past as a way to raise revenue.
Cassidy commented: “The taxman has offered specific tax amnesties in the past but, although being cost effective for HMRC to operate, they have had little overall impact on Treasury tax receipts. The PTSP already offers ‘very similar terms’, to anyone who wants to make a full tax disclosure but HMRC officials seem keen to play this down. If this was properly advertised and promoted as a general tax amnesty, the Government could collect some of the extra revenue it needs without having to put up tax rates for everyone else.”
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 said: “To make the amnesty really work for all taxpayers, the Chancellor should also extend the registration and disclosure deadlines by six months to give more time for the message to get through to everyone who needs to bring their taxes up to date.”
“Having a tax amnesty may seem like a let-off for those who have not been honest about their taxes, but if it raises cash that can be used to protect services, or even reinvested in clamping down harder on serious tax fraud in the future, I think most people would support it.”

Add comment
Log in or register to post comments
Group: Budget discussion group
Find out all about the political compromises, technical background and taxation wishlists that surround the chancellor's Budget statement.