Tax Disputes & Investigations
Campaigns 
Tax Catch Up Plan (TCUP)
Tax Catch Up Plan (TCUP)
Tax Catch Up Plan (TCUP)The Tax Catch Up Plan (TCUP) was launched by HM Revenue & Customs (HMRC) on 10 October 2011. On this page:
The TCUP is an opportunity for those delivering tuition and coaching, who have undisclosed tax liabilities up to 5 April 2010, to come forward and settle with HMRC. The TCUP follows HMRC's use of its legal powers to obtain information about payments made to tutors and coaches from various sources, including the academic, sport, leisure and other sectors. HMRC also uses advanced technical tools such as 'web robot' software which helps identify people who have failed to pay the right tax. Like the earlier Tax Health Plan (THP) and the Plumbers Tax Safe Plan (PTSP), the TCUP is a two-stage, fast track disclosure facility aimed at raising as much additional revenue as quickly as possible. The first stage involves a participant notifying HMRC of their intention to make a disclosure. This needs to be done by 6 January 2012. If this deadline is missed, you are unable to participate in the TCUP. The second stage requires a full disclosure of all errors in the participant's tax affairs together with payment of all outstanding liabilities (including interest and the 'relevant TCUP penalty') to be made by 31 March 2012. As part of a TCUP disclosure, a participant has to calculate the number of tax years requiring disclosure and the 'relevant TCUP penalty' to be paid. Essentially, these relate 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 will face 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 have still paid too little, then no penalty will be due. HMRC states that it expects most people's behaviour to fall into the 'careless' category, meaning they will only have to pay liabilities for up to six tax years. However, where taxpayers decide 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 HMRC 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 TCUP?HMRC has clearly stated that if individuals choose not to come forward under the TCUP and it is later established that they owe tax, they can expect a significantly higher penalty. HMRC has already identified a number of tutors and coaches who it believes and expects should be coming forward by the 6 January 2012 notification deadline. Those who choose not to and/or who later fail to make a full disclosure of all errors by the 31 March 2012 disclosure deadline will face either criminal investigation or formal investigation where criminal prosecution is not considered appropriate. [Top] What happens after I make a disclosure?Once a TCUP 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 TCUP they are effectively agreeing, in advance, to later comply with HMRC requests for information. If they don't, the TCUP disclosure may be rejected and HMRC can then use its legal powers to force the provision of information. Once HMRC completes its check and is satisfied with the disclosure, the participant will be notified in writing. If HMRC later receives information that indicates that the disclosure is materially incorrect it will either issue further assessments for the additional tax due (and charge a much higher penalty than previously charged under the TCUP) or begin a criminal prosecution. [Top] Who can't take advantage of the TCUP?HMRC will not accept disclosures under the TCUP:
[Top] What about VAT?If you think you owe VAT, this liability should not be included in your TCUP disclosure. You should just tick the appropriate VAT disclosure box on the TCUP disclosure form and HMRC will then contact you to explain what you need to do to put your VAT affairs in order. [Top] Is the TCUP a tax amnesty?Contrary to a number of reports, the TCUP 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 TCUP?HMRC believes that there are a significant number of people delivering tuition or coaching who have not told HMRC about all their past income, gains and undisclosed liabilities. The results of the TCUP will undoubtedly be measured against earlier campaigns for its success. What did the earlier campaigns achieve? Well, the Tax Health Plan (THP) received 1,500 disclosures and raised £10 million. Over 1,000 civil investigations have subsequently been opened in respect of non/false THP disclosures from which a further £1 million is expected. The Plumbers Tax Safe Plan (PTSP) received over 300 disclosures and by the end of August 2011 had raised over £1.5 million. At least 7 criminal investigations are known to have commenced and more are planned. [Top] What if I'm not a coach or tutor?The TCUP is specifically designed for those delivering tuition or coaching. However, HMRC has stated that whilst there has been a number of other disclosure opportunities like the TCUP, 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 TCUP) and put their tax affairs in order that they can expect very similar terms to those on offer through the TCUP. 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] How can OneE TDI help?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. 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. Putting it simply, we take control of and resolve all issues relating to tax disputes and investigations so that our clients can get on with their life and their business. Tax disputes and investigations do not have to be taxing! Please see the Testimonials kindly provided by our clients (or their accountants or lawyers), which confirm our levels of client service. [Top] How can I contact OneE TDI?If you would like a free, no obligation discussion with us please contact either Gary Rowson or Mark Taylor on 0800 652 6156 or complete and submit the online form below: [Top] |
