Has HMRC got accountants in its sights?

If the medical profession thought it had enough to worry about already,
doctors are now facing extra scrutiny with a new tax amnesty aimed squarely at
them.

But as HMRC announced its Tax Health Plan as “the first initiative in a new
HMRC campaign focused on professionals”, concerns are mounting over who HMRC
will target next – with some speculating it will be the accountancy profession.

The amnesty was launched last week for medics with understated income over
the past 20 years, and applies to all medical professionals registered with the
General Medical Council and is based on information HMRC has obtained from NHS
trusts, private hospitals and medical insurers such as BUPA.

Similarities between this and the recent New Disclosure Opportunity (NDO) for
offshore accounts have been noted. However, advisers suggest the taxman would
find it much more difficult to apply a similar amnesty to the accountancy
profession.

“The knee-jerk reaction is to guess they would target lawyers and
accountants,” John Cassidy, PKF tax investigations partner, said, “but HMRC
would find it harder to obtain information from third-party sources, like they
have done for the Tax Health Plan and the NDO. If they target accountants it may
have to be on a different basis.”

Fiona Fernie, tax investigations partner at BDO, agrees. “It could be more
difficult for HMRC to obtain information,” she says, “but there is some
information in the public domain – firms’ accounts showing profits per partner,
for instance.”

But could the fragile relationship between accountants and the taxman be put
at risk if HMRC launched an amnesty for them? Not necessarily, because Cassidy
suggests that an amnesty may not be a bad thing. “People can use these amnesties
to sort out their affairs with the minimum of fuss – even if that does apply to
accountants,” he says.

Further reading:

hmrc.gov.uk
/tax-health-plan