Expenses clawback fear as 'tax amnesty' begins

Panicked GPs are inundating accountants with calls after Her Majesty's Revenue and Customs (HRMC) announced a 'tax amnesty' in the run up to an investigation of 20 years' worth of doctors' tax records.

Taxing: GPs face investigations
Taxing: GPs face investigations

HMRC has said it has 'specific intelligence pointing to underpaid tax in the medical profession' although it was unable to provide estimates as to the number of doctors involved.

Laurence Slavin, a partner at specialist medical accountants Ramsay Brown and Partners, said the HRMC could rule that GPs have over-claimed for expenses relating to the use of their car or home for work purposes.

'There is a fear that GPs have underpaid tax here or there but there is a bigger worry that expenses won't stand up to scrutiny,' said Mr Slavin.

'The revenue (HRMC) could rule that claiming 50 per cent of your car use is too high. From its letter, what HMRC is saying is that it is pretty simple to set up an enquiry.'

The HMRC is offering a three-week 'amnesty' for doctors who may have underpaid tax in the past to rectify the situation.

Anyone failing to come forward and subsequently found to have underpaid tax could be hit with a fine.

Mr Slavin said if GPs are chosen for a full investigation, it can take more than a year to process one year's worth of accounts.

'Very often it (HMRC) will investigate because of a single disclosure, which is often by a disgruntled ex-spouse,' he added.

The 'amnesty' had been 'incredibly successful' for the HMRC, Mr Slavin said, as he was inundated with GPs wondering whether they had something to declare.

But Mr Slavin warned that the amnesty had provoked a high response because of the threat of '100 per cent' fines, despite the fact that full fines are rarely handed out.

'You will have to pay interest; but rarely are people hit with 100 per cent fines. Co-operation and mistakes are mitigated and the penalty is more like 30 per cent.'

GPC chairman Dr Laurence Buckman said the amnesty was standard practice in other sectors, and GPs who have kept organised accounts have nothing to fear.

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