Make tax disclosure offers universal

15 January 2010

All taxpayers should be given the opportunity to make a disclosure of unpaid taxes at a reduced penalty charge.

The call came from the Chartered Institute of Taxation (CIOT) following HM Revenue and Customs’ announcement that medical professionals are to have the chance to inform the tax authorities of any arrears on undeclared earned income and to settle any outstanding liabilities with only a 10 per cent rather than a full fine.

This latest ‘disclosure’ deal mirrors that offered people with undeclared assets in offshore accounts.

Although the offshore ‘amnesty’ is closed, HMRC is now targeting doctors and dentists in a similar way.

However, the CIOT believes that such reduced penalty charge deals should be open to all taxpayers as a matter of fairness.

Gary Ashford, chair of the CIOT’s management of taxes committee, said: “Whilst we welcome HMRC encouraging people to get their tax affairs in order, there is a measure of unfairness in offering a deal to one sector of the population and not to others.

“Surely it would be better to have a general arrangement available to all and a concerted effort by HMRC to get their message over?”

The CIOT is also worried that the timeframes allowed taxpayers in the deals are too short.

Mr Ashford added: “It would be sensible to consider a genuine one off disclosure for everyone. And one that lasts sufficiently long and is sufficiently attractive to get people to come forward. This could enable them to clean the slate before the advent of the harsher ‘Naming and Shaming’ rules that come in from April 2010.”