Tax Health Plan (Amnesty for Medical Professionals)

HMRC have announced a tax "amnesty" for medical professionals. The scheme will operate in a virtually identical manner to the recent offshore amnesty arrangements which were badged as the "New Disclosure Opportunity" and the "Liechtenstein Disclosure Facility". The so called "Tax Health Plan" requires medical professionals who have been in receipt of undeclared professional income to initially register their intention to use the "Plan". A full disclosure must subsequently be completed and sent to HMRC along with payment of arrears.

It is implicit that parties who take advantage of the scheme will be immune from prosecution in relation to the tax offences they disclose. The scheme is restricted to tax under-declarations arising purely from working as a medical professional. You may need to consult a specialist solicitor if you have offshore banking arrangements or assets which are "connected" with your tax irregularities; because it is unclear at the present time what approach will being adopted for parties who ought to have already taken advantage of the offshore tax disclosure arrangements. If we feel this is appropriate we will tell you immediately and put you in touch with lawyers who are properly qualified to advise you in this unusual area of law.

Full disclosures are being incentivised with a 10% penalty deal extended to people who come forward. Significantly higher penalties will apply if disclosures made under the new scheme are shown to be inadequate. It is conceivable that prosecutions will be brought in "extreme" cases of incomplete or non- disclosure. All large providers of medical services and insurance products are required to make annual returns to HMRC of payments made to medical practitioners. It would be naïve of medical professionals in receipt of private income to suppose that details of payments made to them will not have been given to HMRC.

Anybody who is contemplating a disclosure must register their intention to do so with HM Revenue and Customs. A full disclosure must be submitted along with the outstanding tax by the prescribed deadline which is 30th June 2010. Whilst this may seem like sufficient time to prepare and submit the disclosure, a detailed review can be time consuming and the window will soon disappear.

The first step is to register your intention to make a disclosure. This can be done in writing or by telephone or online before 31st March 2010. You will not need to provide any detailed information at this point other than your date of birth and contact details and possibly your existing tax reference. A Disclosure Reference Number will be sent to you for use in all subsequent correspondence.

"Hector Hector" have a great deal of experience of preparing disclosures and an understanding of what HM Revenue and Customs will find acceptable. We will ensure that the information gathering and formulation of the disclosure is properly managed and cost effective. The Tax Health Plan makes provision for specialist advisors to submit the disclosure on your behalf. Looking for evidence to support your position and delving back into history and reconstructing events can be very time consuming. Our advice is to consider your position now and consult us at the earliest opportunity.

It is vital that HMRC are warned about potential payment problems before you submit your disclosure. If you anticipate being unable to settle all of the outstanding tax then you must open a dialogue at the earliest opportunity. We will be able to mediate for you in these circumstances. Note that in all cases interest will be charged by HM Revenue and Customs for the late payment of tax.

The Tax Health Plan is restricted to income from medical work and whilst HM Revenue and Customs are anxious to encourage other tax disclosures, they are at pains to indicate that the favourable terms offered here will not be made available outside the amnesty. It is our opinion that this position may well be unsustainable in context of penalties for example. Specialist advice should be taken by medical professionals with more broad based tax problems such as undeclared capital gains or investment income.