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Physician, heal thyself!

If your hospital consultant clients are feeling slightly queasy and/or having mild palpitations you may be able to diagnose their problem.

HMRC will shortly be launching an initiative focussing on medical professionals who have undeclared tax liabilities and they are encouraging offenders to come forward under a new "Tax Health Plan" (THP).

This will work in a similar way to the recent offshore disclosure facility – if the medical professional makes a full disclosure of undeclared takings then he will be able to benefit from a reduced 10% penalty. The requirements are:-

The medical professional has until 31 March 2010 to register his intention to make a voluntary disclosure.
He then has until 30 June 2010 to make the disclosure and arrange for payment of all tax, interest and penalties.
The intention to disclose can be made by phone (0845 600 4508) or by using the e-form available via the link on the HMRC website: www.hmrc.gov.uk/tax-health-plan.

Although the Press Releases do not say so it is understood that HMRC are looking for Hospital Consultants to come clean on undeclared commissions as well as fees from medical insurers. HMRC are believed to have already issued formal notices to BUPA, Sun Life and other institutions to obtain details of commissions paid.

Mike Wells, HMRC's Director of Risk and Intelligence said on launching the scheme:-

"From April we will be using the information at our disposal to investigate medical professionals who have not declared their full income. I therefore strongly urge any in this group who think they may have outstanding tax liabilities on their income to get in touch with HMRC and get their tax affairs in order simply and on the best available terms."

So it's perhaps time for the bitter pill to be swallowed.

As with all matters medical, side effects matter. And perhaps the most interesting here is the impact that that this initiative may have more generally on investigation settlements following spontaneous disclosure. The more often HMRC offer "special deals" to limited categories of taxpayer the more difficult it becomes for them to resist an argument that it is an abuse of authority to insist on extracting much higher penalties from taxpayers who have not been afforded similar disclosure opportunities. So this may be the right time for clients with "something to declare" to consider coming forward even if they are not within the declared scope of the THP.

For more advice on where you stand on disclosures please contact us.