Are your affairs compliant?

HM Revenue and Customs (HMRC) have recently launched a tax amnesty, officially named the 'Tax Health Plan', targeted at the medical profession. However, it has been speculated that lawyers and barristers will be next on their list.

The plan currently encourages doctors and dentists to disclose undeclared income upon which UK tax is due. They will be required to pay unpaid tax, interest and most likely a reduced 10% fixed penalty. It is likely that this tax amnesty will be followed by further amnesties on other professions during 2010.

With this in mind, now could be the right time to look into key areas which HMRC may identify as high risk and ensure that your affairs are compliant.

Attention will be focused on undeclared income arising from other sources in particular, for example, income from directorships or from acting as a Judge. If necessary, HMRC will exercise their power to obtain information from third parties (as they have with doctors), therefore it is important to ensure that all income has been disclosed.

Work in progress

As UITF 40 adjustments can have a significant impact on your taxable income; work in progress needs to be correctly accounted for. Particular care should be taken when accounting for contingent work in progress.

Also consider motor expenses. Taxable income could be understated if these have not  been correctly calculated - specifically if the correct private use adjustment has not been applied. Therefore it is imperative that the correct split between business and private use is documented; ideally a detailed log of mileage should be maintained.

Contact us

If you are concerned that this may affect you please contact our Legal sector team or email your enquiry.