HMRC Targets Teachers in New Campaign

HM Revenue & Customs is targeting private tutors and coaches in its latest campaign to clamp down on unpaid tax.

It is proposing a scheme which offers reduced penalties for voluntary admissions.

The Tax Catch up Plan (TCP) is for people providing private lessons, regardless of whether they have a teaching qualification. HMRC says it is aimed at those who profit from tuition and coaching, as a main or secondary income, on which the correct tax has not been paid because they have not told HMRC about it.

Anyone who provides tuition, instruction or coaching can take advantage of the scheme, including tutors for academic subjects, fitness and dance instructors, musical instrument teachers and life coaches. Under TCP, they have until 31 March 2012 to come forward and tell HMRC about their outstanding tax for the years up to 5 April 2010, and pay what they owe.

HMRC says those who come forward by the deadline are likely to receive what it calls ‘the best possible terms’ for paying the tax owed, with any penalties unlikely to be more than 20% of the unpaid tax. After that date, it is planning investigations and warns that anyone who waits for HMRC to come to them will pay much higher penalties and could face criminal prosecution.

Marian Wilson, head of HMRC campaigns, said: ‘We are making it as easy as possible for people offering tuition and coaching to use this unique opportunity to put their tax affairs in order by making a full disclosure, and benefit from the best possible terms. We are using various intelligence sources to identify and then target those who do not take advantage of this opportunity to declare their full income. The message is clear: contact us before we contact you.’

Gary Ashford, who represents the CIOT on HMRC’s compliance reform forum, said: ‘HMRC’s targeting of another class of taxpayers comes as no surprise, given the government’s high profile target of bringing in an extra £7bn through initiatives to tackle tax avoidance, evasion and fraud by the end of the parliament. They are right to highlight an opportunity like this but we think they need to make this possibility open to all.’