The Tax Catch up Plan

Following the crack down earlier this year on plumbers, on 10 October 2011, HMRC started a campaign to target private tutors and coaches who may owe additional tax.

The scheme includes academic and non-academic tutors, fitness, dance, musical tutition, the services of life coaches and others.

What I need to know?

The scheme is aimed at individuals who profit from tuition and coaching either as their main or secondary income on which the correct tax has not been paid because they have not told HMRC about it.

The catch up plan has two stages:

• Between 10 October 2011 and 6 January 2012 you must register with HMRC to "notify" them that you plan to make a voluntary tax disclosure.
• By 31 March 2012 you must then tell HMRC what you owe and pay the tax, interest and penalties due for the tax years up to 5 April 2010.

The plan should then make it easier for tax payers to keep their tax afairs up to date in the future.

Individuals who come forward by the deadline are more likely to receive more lenient penalties, it is unlikely to be more than 20% of the unpaid tax.

After 31 March 2012, HMRC will use information from different sources to investigate those who have not come forward. Where tax is payable, the penalties will be much higher or the tax payer may even face criminal prosecution.

If you or any of your colleagues have any concerns about this please contact our tax team straight away.