Whether they’ve been working to the cash-in-hand culture, handling under-the-table deals or storing their earnings in a shoe box under their beds, tax-evading traders in the region were yesterday given a chance to come clean, without facing an HMRC backlash.
The Government launched a new tax amnesty for plumbers as the latest in a series of disclosure plans that could the help the taxman significantly boost its coffers in these times of austerity.
The “Plumbers Tax Safe Plan” will offer a penalty rate of 10 per cent of the tax due in most cases, which is a 10th of the maximum – although in certain circumstances there will be a 20 per cent or zero penalty. Taxpayers from other sectors “can expect very similar terms”
Disclosures must be registered with HMRC before 31 May 2011 and full details of the undeclared income together with payment of the outstanding tax, interest and the special amnesty penalty will have to be made by 31 August 2011.
Louisa Naylor from the North East and Yorkshire operation of Grant Thornton UK LLP, told bdaily that the scheme could actually have a wider impact on the region beyond its small army of independent plumbers.
She said: “The amnesty is described as being targeted at plumbers, however it is also open to other traders who have undisclosed taxable income.
“Many of those who come forward will actually qualify for lower penalties depending on their circumstances but it is not clear what any negotiated penalty might be in the end.
“Those who do not come forward face higher penalties than those offered under this PTSP, up to 100 per cent of the additional tax or a criminal investigation in some circumstances.
“In addition, HMRC may limit the years it can go back through during investigation to less than the maximum of 20 years which it could normally assess. This will depend upon the nature of the offence however and HMRC has still to clarify the exact terms which will apply.”