United Kingdom
1 March 2011 - New disclosure facility for plumbers
HMRC has announced a new facility for plumbers and other traders to disclose and pay under-declared tax liabilities, with the benefit of a limited penalty.
The main features of the 'Plumbers Tax Safe Plan' (PTSP) are:
- It is primarily aimed at people in the plumbing, heating or gas installation trades, including anyone who installs and repairs pipes and fixtures for water, drainage or gas systems in a building. However, HMRC states that the PTSP is also open to anyone who is "not a plumber".
- The deadline for notifying HMRC of an intention to participate in the facility is 31 May 2011, and the deadline for making a disclosure and paying the tax, class 4 national insurance, penalty and interest due (or agreeing an instalment plan with HMRC) is 31 August 2011.
- Any VAT liability must be settled separately.
- The maximum period for which liabilities must be settled, and the level of penalty, depend on the reason for the under-declaration:
Reason for under-declaration Period of liability Penalty
Mistake (despite having taken reasonable care) 4 years Nil
Careless error 6 years 10%
Deliberate under-declaration or non-notification 20 years 20%
As the penalties under the PTSP are substantially lower than the maximum penalties which might otherwise be charged, the PTSP obviously merits consideration by any taxpayer who has an under-declared tax liability but who is unable to take advantage of the Liechtenstein Disclosure Facility, which offers potentially better terms.
Consideration should also be given to making a voluntary disclosure outside the terms of the PTSP, where it might be possible to negotiate a better settlement. For example, in the case of a careless error, HMRC may be prepared to suspend a penalty for up to two years, following which the penalty may be cancelled if specified conditions have been met.
Please contact Steve Besford to discuss the PTSP or any other means of settling under-declared tax liabilities.