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The guidance given by HMRC in relation to its new "Tax Health Plan" (THP) is turning "a simple and straightforward opportunity" into something of a farce.

To start with the Tax Health Plan tax penalty discount scheme was only available to those registered with the General Medical Council (GMC). Now HMRC says that it going to extend the scheme to dentists, and is considering whether to include other health professionals "at this time" as of course, not all medics or health professionals are in fact registered with the GMC.

HMRC is facing difficulties in trying to persuade other medics (or anyone else) to come forward at the same time as the terms of the old income taxes acts penalty regimes and HMRC's new tax penalty powers found in the 2007 Finance Act will not give you the same benefits as the THP's 10% disclosure opportunity, and you may even face criminal prosecution.

Are other health professionals better off waiting to see what will happen? Well, it seems that HMRC could be offering this new facility to anyone...in a white coat; this includes, as we have now seen, dentists and Taxation magazine suggests chiropractors too!

The Chartered Institute of Taxation (COIT) and its sister body, the Association of Taxation Technicians (ATT) think that the disclosure opportunity should not just be limited to the medical fraternity, instead it should apply universally. They are requesting that HMRC offers a 10% tax penalty to everyone. That would tick both the boxes - "simple" and "straightforward", but would it also apply to MPs?

Even if it did apply to all, there remains a fundamental unfairness, which may yet have to be resolved by recourse to the courts: HMRC's Dave Hartnett has said that he is likely to create new offshore disclosure "opportunities" that are similar in substance to the "tax crime does pay" deal with Liechtenstein. That rosy deal lasts until 2015.

Links:

Tax Health Plan: terms and planning points


HMRC: Tax Health Plan Hot Topics