Doctors pose 'serious tax risk', claims HMRC

There are solid grounds for targeting doctors and dentists who have not declared all their income, according to HM Revenue and Customs (HMRC).

Speaking in London last week at a roundtable discussion about HMRC's Tax Health Plan (THP), permanent secretary for tax Dave Hartnett said: ‘A common feature of all our campaigns is that they address a sector or a group where there is a serious tax risk.'

Under the THP, which was announced in January, doctors and dentists who have failed to disclose all their earnings have until 31 March 2010 to notify HMRC that they wish to make a disclosure. They then have a further three months to 30 June to submit it their disclosure and make full payment.

If they do this, the tax penalty they face is just 10% of the amount of tax owed. If they do not take the opportunity offered under the THP, Mr Hartnett said HMRC would go after the individuals concerned across the country, using the information that it holds about them.

If this is the case, GPs who are found to owe tax on income going back for up to 20 years could face a maximum penalty of 100% of the tax owed (on top of full repayment of the debt and interest charged on it).

‘Our campaigns are an opportunity for people to get their tax affairs right,' said Mr Hartnett.

BMA private practice committee chairman Derek Machin who attended the discussion said he had initially understood all professions, not just medical and dental were to be targeted in this particular HMRC campaign. ‘There's been a lot of comment about why doctors, and why doctors now.'

Mr Hartnett said that HMRC had to start somewhere and it expects to look at a variety of groups in the trade sector as well as at the professions.

‘There is no particular reason why doctors and dentists are first.

‘We've risk assessed doctors and dentists and we've found there is a material level of non-compliance in various ways'. He added that HMRC had obtained data suggesting that the problem for this group was bigger than it had first thought.

Asked whether the many GPs who are self-employed and in partnerships had any bearing, Mr Hartnett said this was not a risk factor.

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