HMRC have been dedicated to tackling tax avoidance and evasion throughout the course of this financial year. They have already launched amnesties for professionals working in the medical sector and for those individuals who hold funds offshore. Now, it is expected that they will launch an amnesty on undisclosed earnings for all self-employed individuals.
In the aforementioned amnesties, individuals have been invited to disclose during a specified period of time in order to receive a reduced penalty of ten percent on top of the tax owed. Individuals will only receive these “preferential terms” if they make a full and accurate disclosure.
Speaking to Contractor UK, Grant Thornton’s Mike Warburton stated: “The Revenue plans to extend this type of disclosure facility to other professions and other categories of people where they think there’s tax to be collected. One of the areas where there may be scope to extend what HMRC have done with offshore bank account holders, doctors and dentists is the self-employed.”
Mr Warburton also spoke of the previous disclosure facilities, commenting: “HMRC have discovered it’s quite an effective way of collecting money at relatively low effort.”
Mr Warburton said of the disclosure facility model: “Individual tax enquiries take time and resources; what HMRC wants is a quick return [hence] a taxpayer group amnesty, with the threat of ‘heavy boots’ for non-compliance.”
He concluded with his thoughts on the self-employed being the next target group: “It’s always been the case that for a PAYE worker, the normally right amount of tax is paid at source. Whereas for people who have gross earnings, where the tax collection is dependent on the accounts that they submit to HMRC, there is scope for money to be diverted. HMRC wants to target the black economy, and that includes those self-employed people who fail to properly disclose all their receipts.”