HM Revenue and Customs (“HMRC”) have recently announced a new voluntary disclosure facility, the Health and Wellbeing Tax Plan, targeted at those working in the health and wellbeing sector. This new facility will allow non-compliant taxpayers in this sector to bring their tax affairs up to date.
But why do HMRC like voluntary disclosure facilities? Well, in 2012, approximately 56,000 taxpayers took part in HMRC’s voluntary disclosure facilities paying over £1.3 billion in additional tax. So it should be no surprise that this voluntary disclosure facility has been announced.
Brief Details of the Health and Wellbeing Tax Plan
The Health and Wellbeing Tax Plan is a follow up to the Tax Health Plan which closed in October 2010 where it is reported medical practitioners made disclosures regarding their tax affairs paying an additional £53.7 million in tax, including £1 million from a doctor and £0.3 million from a dentist.
Launching a follow up campaign implies a perception on the part of HMRC that healthcare professionals have not done enough to regularise their tax position. This might in part be due to continuing investigation activity providing evidence that adjustments are necessary to the submitted tax returns of healthcare professionals. It might also be due to the decision in Dr Samadian v HMRC where travel between a home office and a private hospital was not accepted as business travel.
The targets of the Health and Wellbeing Tax Plan are different to the earlier Tax Health Plan and it is open to anyone with undisclosed tax and duties who works in healthcare fields such as physical therapy, alternative medicines and other therapeutic professions, for example:
- physiotherapists, chiropractors, chiropodists, osteopaths and occupational therapists
- practitioners in homeopathy, acupuncture, reflexology, nutritional therapy and other alternative medicines, and
- physiologists, speech therapists and arts therapists.
It is not open to doctors, dentists and other medical professionals who were eligible for the previous Tax Health Plan. Disclosures can be made by individuals, companies, trustees and on behalf of deceased persons. Notification of your intention to disclose has to be made by 31 December 2013 and your disclosure and payment has to be made by 6 April 2014.
What Action Should You Take?
As always there is a race against time. Non-compliant taxpayers must make their disclosure before HMRC first discover their behaviour. The difference will usually be in the amount of money you have to pay, both in terms of tax, interest and penalties to HMRC and in professional representation costs. It will almost always be the case that getting in first with your disclosure will be the least expensive option.
For those individuals working in the health and wellbeing sector who have properly returned their income and capital gains, they will have nothing to fear from the Health and Wellbeing Tax Plan.
For more information about the implications of the Health and Wellbeing Tax Plan, or if you have uncertainties about your disclosed tax position, please contact us to discuss your position by email or call 020 3195 1300.