HMRC targets doctors and dentists

Doctors and dentists are the latest targets of HMRC’s campaign to recover unpaid tax.

A final warning has been issued to more than 2500 health professionals that HM Revenue and Customs (HMRC) suspects are not up to date with their tax affairs.

The move is the latest in a raft of HMRC targets, which have so far included restaurant owners, plumbers, private tutors and scrap metal dealers. People selling on internet market places and electricians are next on the list to be targeted in early 2012.

The letters warn that if medics fail to come forward within 21 days, they may end up incurring significant charges, or be referred to the Criminal Investigations department.

Gary Ashford, who represents the CIOT on HMRC’s Compliance Reform Forum, and is National Head of Tax Investigations and Dispute Resolution at RSM Tenon, commented:

“These are 2,500 health professionals who HMRC are not giving a clean bill of tax health to.

“HMRC made clear at the launch of the Tax Health Plan in January 2010 that they would be adopting a carrot and stick approach. They have offered the carrot of a relatively low penalty rate for doctors to get their affairs in order and 1500 health professionals took it up, bringing in £10 million for the Exchequer. Now they are wielding the stick at those who have not come forward.

“People should not underestimate the amount of data that HMRC is holding. They have been talking to medical insurance companies, pharmaceutical companies and locum agencies. What we are now seeing is HMRC starting to use that information, to identify who has not notified HMRC of all their tax liabilities. “

Warning of HMRC’s sophisticated approach, Mr Ashford adds: “Anyone who is worried that they have been underpaying tax – whether deliberately or in error, and whether they are doctors or anyone else – should get professional advice without delay. Penalties will generally be less severe for taxpayers who come forward voluntarily to put their affairs in order with HMRC.”