Contractor accountants will be interested to learn that HMRC launched its Electricians Tax Safe Plan last week to enable sparkies who may have been guilty of tax evasion the chance to rectify matters in return for reduced penalties.
Electricians who want to take advantage of this amnesty must register their intent to make a disclosure no later than the 15th May and repay back tax, interest and penalties by August 14th.
If somebody has made a mistake on their tax return, or omitted to inform the Revenue that they have gone self-employed, the penalty on overdue tax will only be between 0% and 10% of the overdue amount. However, if the action was a deliberate means of avoiding tax, penalties will be charged at 20%.
HMRC intends to write to 50,000 electricians encouraging them to take advantage of the Plan.
Gary Ashford from the CIOT said HMRC has now got sophisticated ways of identifying tax evaders. The plumbers campaign led to 10 arrests and the Revenue is determined to meet its target of recouping £7 billion through initiatives tackling fraud, tax avoidance and evasion.
John Cassidy, a partner at PKF, warned that the Revenue will have done its homework and will know which electricians are most likely to have been avoiding tax. Top of the list will be those who have registered with one of the industry bodies but failed to file a tax return.
Although this is not a general tax amnesty, people working in other sectors may want to get in touch with HMRC and make a voluntary disclosure.