Tax Disputes & Investigations
Plumbers Tax Safe Plan (PTSP)
Plumbers Tax Safe Plan (PTSP)On 1 March 2011, HM Revenue & Customs (HMRC) launched the Plumbers Tax Safe Plan (PTSP). It is the first disclosure facility offered to 'tradesmen'. HMRC previously launched its 'Professionals Campaign' in 2010 introducing the Tax Health Plan (THP). The PTSP disclosure facility follows HMRC's use of its legal powers to obtain information about people working within the plumbing, heating and gas industry. On this page:
The PTSP provided plumbers, heating engineers and gas fitters with the opportunity to register and make a full disclosure of all errors in their tax affairs. Like the THP, the PTSP was a two-stage, fast track campaign aimed at raising as much additional revenue as quickly as possible. The first stage involved a participant notifying HMRC of their intention to make a disclosure. This had to be done by 31 May 2011. If this deadline was missed, one could not take part in the PTSP. The second stage required a full disclosure of all errors in the participant's tax affairs together with payment of all outstanding liabilities (including interest and the 'relevant PTSP penalty') to be made by 31 August 2011. As part of a PTSP disclosure, a participant had to calculate the number of tax years requiring disclosure and the 'relevant PTSP penalty' to be paid. Essentially, the penalty related to a participant's 'behaviour' (i.e. why and how things went wrong?) If a participant 'deliberately' kept information from HMRC and paid too little tax then they faced a higher penalty than if they had simply paid too little because they were 'careless'. If a participant took 'reasonable care' to ensure that their tax affairs were correct, but had still paid too little, then no penalty was due HMRC expected most people's behaviour to fall into the 'careless' category, meaning they only had to pay liabilities for up to six tax years. However, where taxpayers decided that fall into the 'reasonable care' or 'careless' categories, we expect those disclosures to be closely scrutinised by HMRC! If HMRC successfully argues that a taxpayer's behaviour was 'deliberate' the law allows it to seek liabilities for up to twenty tax years. HMRC has published illustrations of what it believes constitutes 'reasonable care', 'careless errors' and 'deliberate errors'. These do not cover all eventualities and are open to interpretation. Expert specialist advice is essential to help reduce potential liabilities/penalties. [Top] What happens if I don't take advantage of the PTSP? HMRC has clearly stated that if individuals choose not to come forward under the PTSP and it is later established that they owe tax, they can expect a significantly higher penalty. [Top] What happens after I make a disclosure? Once a PTSP disclosure is made, HMRC will cross-check it against information it holds to satisfy itself that the disclosure is full and correct. In certain instances, HMRC will ask for additional documents and information to check the disclosure. Taxpayers should be aware that by participating in the PTSP they are effectively agreeing, in advance, to later comply with HMRC requests for information. If they don't, the PTSP disclosure may be rejected and HMRC can then use its legal powers to force the provision of information. [Top] Who can't take advantage of the PTSP? HMRC will not accept disclosures under the PTSP:
[Top] If you think you owe VAT, this liability should not be included in your PTSP disclosure. You should just tick the appropriate VAT disclosure box on the PTSP disclosure form and HMRC will then contact you to explain what you need to do to put your VAT affairs in order. [Top] Contrary to a number of reports, the PTSP is not a 'tax amnesty'. It is not intended to allow taxpayers to escape paying tax liabilities that are legally due nor does it provide immunity from prosecution to those that come forward. Anyone concerned about the risk of possible prosecution should seek specialist advise and discuss whether the Civil Investigation of Fraud procedure (under Code of Practice 9 (COP9) is better suited. [Top] What results are expected by HMRC from the PTSP? [Top] What if I'm not a plumber or a heating or gas fitter? The PTSP is specifically designed for those working in the plumbing industry. However, HMRC has stated that whilst there has been a number of other disclosure opportunities like the PTSP, if there has not been one for which you qualified, you should not wait to disclose. There is no guarantee that HMRC will offer a disclosure facility that suits you or, moreover, that HMRC will not commence a formal investigation of your affairs before any such facility is offered. HMRC have assured those who voluntarily come forward (under the auspices of PTSP) and put their tax affairs in order that they can expect very similar terms to those on offer through the PTSP. By approaching HMRC (rather than risking HMRC initiating an investigation), taxpayers can help reduce the potential financial penalties that could be charged and best protect themselves from potential prosecution. The risk of prosecution is real. HMRC believes that criminal charges/trials have a strong deterrent effect on those who may have evaded tax (or be considering evading tax). It intends to significantly increase the number of direct tax prosecutions in the years up to 2015. [Top] If you know or suspect that you need to disclose undeclared income, profits and/or gains to HMRC, whether they arise in the UK or offshore, you should seek specialist advice before doing so. The management of the disclosure process and the way in which the relevant facts are presented are key to achieving maximum penalty mitigation and protection from further enquiry by HMRC. At the core of OneE TDI is a highly experienced team specialising in all areas of tax disputes and investigations. We offer confidential, non-judgemental and invaluable advice to best defend our clients. We have a proven track record in managing all contentious tax matters and provide an outstanding, cost-effective service which results in tangible benefits and savings for our clients. We have up-to-date knowledge of all HMRC campaigns and disclosure facilities and are able to secure the best available terms for our clients. Our advice saves our clients time and money and helps reduce their potential exposure to tax, interest and penalties. Please see the Testimonials that our clients have kindly provided us. [Top] If you know or suspect that you need to disclose undeclared income, profits and/or gains to HMRC, whether they arise in the UK or offshore, you should seek specialist advice before doing so. The management of the disclosure process and the way in which the relevant facts are presented to HMRC are key to achieving maximum penalty mitigation and protecting you from further enquiry by HMRC. In addition, you can also protect yourself from being 'named and shamed' by HMRC as part of its 'Publishing the Names of Deliberate Defaulters' programme. [Top] How can I contact OneE TDI? Whilst we endeavour to provide informative and accurate information, the content on this site is for general information purposes only and should not be taken to constitute tax or legal advice which must always be tailored to individual circumstances. Please contact us if you would like to discuss matters. [Top] |
