HMRC to target tutors in tax crackdown
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Private
tutors, fitness, dance and lifestyle coaches are to be targeted as
part of HM Revenue & Customs' (HMRC) efforts to reduce tax
evasion, according to a leading local tax expert.
Simon Warne, tax partner at Crowe Clark Whitehill, a national
firm offering audit, tax and business advisory services with local
offices in Tunbridge Wells and Maidstone, believes Kent will be
high on the taxman's list of targets.
He said: "HMRC feels that tutors and coaches present a high
risk, in terms of underpaying tax, because these professionals are
well-placed to earn money from providing tuition and coaching -
either as a main or a secondary income, with many paid in cash.
"The county has a thriving community of tutors and coaches, in
part because many families in Kent have their children coached to
help them secure 11-plus exam success and a place at a grammar
school. In recent years there has also been a growing market for
dance and fitness classes, and HMRC will be looking at whether the
instructors, many of whom probably have more than one job, are
fulfilling their tax obligations."
HMRC recently announced it is to start using "web robot"
software, combined with its Connect computers system. The aim is to
search the internet to identify people who have failed to pay the
right amount of tax as a result of having a second undeclared job
or being self-employed.
Simon Warne added: "Over the past few years HMRC has provided
disclosure opportunities for various businesses including doctors,
dentists and plumbers. Following the end of the disclosure periods,
HMRC launched investigations into individuals. The disclosure
facility 'Tax Health Plan,' which was provided for doctors and
dentists in 2010, has already produced additional tax revenue of
over £10m so far, of which more than £1m was raised from a single
doctor and £300,000 by one dentist.
"Taking advantage of disclosure facilities may significantly
reduce potential penalties, and experience of previous crackdowns
suggests that anyone is eligible to take advantage of the
disclosure opportunities. The new facility, mainly for those
providing private tuition and coaching, is expected to open in
autumn 2011 and may also include a disclosure opportunity for
'all'.
"My advice, especially to those targeted by the disclosure
opportunities, is to ensure that all tax affairs are up to date,
and if not, to ensure that they are brought up to date during the
disclosure period to avoid unnecessary and excessive
penalties."
n Simon Warne can be contacted on on 01622 767676 or e-mail
simon.warne@crowecw.co.uk
Wednesday, September 07 2011
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