The latest HMRC disclosure opportunity, giving electricians a chance to settle ‘back taxes’, began last week. 50,000 electricians around the country will start receiving letters this month warning them to pay any undisclosed taxes. Covered by Chartered Accountants Tax News HMRC announced this, and a number of other campaigns, last week.
Under this particular time-limited tax ‘opportunity’, electricians can pay the tax they owe, with lower penalties. This includes those who make mistakes in the amount of tax they pay – even though they have taken reasonable care; those who are careless; or those who deliberately have failed to tell HMRC about something they should have paid tax on.
If a full disclosure is made, most face a reduced penalty rate of 10%, with a maximum of 20%. HMRC are making it clear that those who do not choose to make a disclosure will face substantial penalties and potentially even criminal prosecution.
The Electricians Tax Safe Plan (ETSP) is aimed at anyone who installs, maintains and tests electrical systems, equipment and appliances – and covers any tax owed, for whatever reason.
HMRC are using a variety of intelligence sources to target electricians who have not declared their full income. This is the same method used for the recent plumbers’ campaign which led to 10 arrests and thousands of investigations.
The information comes from a wide range of sources, including online advertising, industry bodies, trade directories, professional ‘electrical safety’ certificates, trade suppliers and tax records. Using specialised software, this detailed information is intended to enable HMRC to target those who should come forward and use the disclosure opportunity. HMRC have advised however that not everyone who receives a letter will owe tax.
Under the campaign, electricians must come forward between 14 February and 15 May to tell HMRC they want to take part. Once they a decision has been made to disclose, the deadline is then 14 August to make full disclosure and arrange for payment of the taxes outstanding.
More information on the ETSP is available here.