Solicitors up against the clock from new HMRC campaign

Solicitors are the latest group to find themselves under the HM Revenue Customs (HMRC) spotlight. HMRC has given solicitors until 9th March 2015 to bring their tax affairs up to date and report any income not previously declared.

“Many lawyers are unsure whether they are affected and how to use this opportunity to settle any outstanding liabilities under the best possible terms. With only 4 weeks left until the 9th March deadline, there is a danger they will leave it too late and incur hefty penalties from the Revenue, explained Moore (South) LLP Salisbury Partner, Robert Newman.

“We’re urging individuals to seek professional advice now and are offering solicitors a free, initial fact finding meeting to check their tax affairs are in order. They may currently be in a difficult position and not sure of the best way to find out the relevant information, and would like an independent view on their tax situation”.

Robert added: “Although HMRC is not allowed to go on ‘fishing expeditions’, it is likely to have collected information from third parties that their systems have identified as undeclared income on a wide scale; just ask your doctor, plumber or electrician. They know from bitter experience how even the smallest amounts can be picked up!”

HMRC has provided guidance and examples of situations where it might be appropriate for solicitors to make a disclosure on their website. Alternatively, the Solicitors' Tax Campaign has a dedicated helpline on 0300 013 4749 providing guidance on how to make a disclosure.

Solicitors with undeclared income who participate in the campaign are likely to face lower penalties than those who do not make voluntary disclosures but are subsequently found to owe money. The voluntariness of disclosure may also be taken into account when considering whether to pursue a criminal investigation.

Tax and interest will still need to be paid, but the penalty is likely to be between 0 and 20 per cent of the amount owed, depending on the circumstances, compared to potential penalties of up to 100 per cent of unpaid liabilities, or even up to 200 per cent for offshore related income.

This initiative is the latest campaign to be launched by HMRC, building on earlier campaigns that have already raised almost £1 billion from voluntary disclosures and other follow up activities.

For a free initial consultation, please contact your local office, Chichester, the Isle of Wight, Salisbury and Southampton..