Tax Disputes & Investigations

Tax Health Plan (THP)

On 11 January 2010, HM Revenue & Customs (HMRC) launched its 'Professionals Campaign' introducing the 'Tax Health Plan' (THP). This announcement followed HMRC obtaining information from third parties such as NHS trusts, private hospitals and medical insurers to help check the accuracy of medical practitioners' Tax Returns.

The THP was the first specific disclosure facility offered to taxpayers in respect of undeclared income, profits and/or gains arising in the UK. The THP provided doctors, medical specialists and consultants (regulated by the General Medical Council) and dentists with the opportunity to make a full disclosure of all errors in their tax affairs, irrespective of whether it related solely to the medical profession or not. For any liabilities that arose directly from the medical profession, the THP offered a fixed penalty of 10% of the undeclared taxes/duties. Any liabilities not connected to the medical profession still had to be disclosed, but the fixed 10% penalty was not available in respect of those taxes/duties.

Like the 'Offshore Campaign' (Offshore Disclosure Facility and then the New Disclosure Opportunity) the THP was a two-staged, fast track campaign. The first stage involved the taxpayer notifying HMRC of their intention to disclose. This had to be done by the end of March 2010. The notification did not commit the taxpayer to making a disclosure, but if this deadline was missed the taxpayer could not take part in the THP. The second stage required the taxpayer to make a full disclosure of all outstanding liabilities and pay these together with interest and the relevant penalty by 30 June 2010. As part of the disclosure, the taxpayer had to enter into a formal settlement contract with HMRC and sign a declaration that the disclosure was correct and complete. No mention was made of a date whereby HMRC had to either accept or reject the disclosure made.

In advance of the March notification deadline, HMRC cross-referenced data obtained from third parties to identify some taxpayers who had yet to come forward to notify their intention to make a THP disclosure and who HMRC believed may have errors in their personal tax affairs. HMRC then wrote to these individuals. The letter stated: -

"Based on data we hold, we are writing to those doctors and dentists whom we think may be interested in this Tax Health Plan."

Contrary to a number of reports, the THP was not a 'tax amnesty'. It was not intended to allow taxpayers to escape paying tax liabilities that were legally due nor did it provide immunity from prosecution to those that came forward.

So what results did the THP produce:

• £10 million from over 1,500 disclosures;
• £6,667 tax was the average disclosure; and
• 1 individual payment of over £1 million by a doctor and 1 individual payment of over £300,000 by a dentist.

Since the THP closed, HMRC has continued cross-referencing data obtained from third parties to check the accuracy of the disclosures made and identify taxpayers who failed to come forward. We understand that HMRC has opened 100 (approx) formal investigations where prosecution was not considered appropriate and is expecting to open thousands more in 2011 (and possibly beyond). HMRC is also understood to be considering commencing a number of criminal investigations in respect of medical professionals.

Although participation in the THP is now no longer possible, anyone with undeclared tax liabilities, whether they arise offshore or in the UK, is still strongly advised to make a disclosure to HMRC. 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.

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 manage all issues relating to tax disputes and investigations so that our clients can get on with their life and their business. What price peace of mind?

Please see the Testimonials kindly provided by our clients (or their accountants or lawyers), which confirm our levels of client service.

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:

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.

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