HMRC Targets Solicitors

HMRC has confirmed that it plans to target solicitors it suspects of tax avoidance. Solicitors suspected of not declaring income will be able to take advantage of the Solicitor's Tax Campaign , a three month voluntary tax disclosure window in order to bring their tax affairs up to date with HMRC.

Solicitors are encouraged to notify HMRC of their intent to disclose any unpaid tax before 9th March 2015. The disclosure of any tax owed, plus the repayment of the amount, must be made before 9th June 2015.

If a solicitor does not come forward by 9th March in order to take advantage of the disclosure facility, and HMRC has information to suspect that tax has been unpaid, a full tax investigation may be launched, which in extreme cases can lead to criminal investigations.

The Solicitors Tax Campaign is the latest HMRC sector campaign which has previously targeted other professions such as doctors and dentists. HMRC’s approach of targeting sectors has recouped almost £1bn in undeclared tax.

As with most HMRC disclosure facilities, penalties will not be as severe if a voluntary disclosure is made, rather than if HMRC launches a full tax investigation into suspected tax avoidance. It has been reported that if a solicitor is found to have deliberately withheld tax from HMRC they could face a tax investigation going back up to 20 years. If, for example, unpaid tax has been a simple oversight, the maximum amount repayable would be 6 years.

HMRC continues to develop new approaches in an attempt to reduce the tax deficit, which has been estimated at £34bn. The Solicitor Tax Campaign has been designed to encourage solicitors to come forward to declare any unpaid tax. Even if tax that has been undeclared is a simple oversight, you could still face the potential of a full tax investigation by HMRC.

If you are a solicitor and you wish to seek confidential advice from a tax investigation professional in relation to your tax position you can contact Forths on 0113 387 5670. Alternatively you can fill out an Enquiry Form and we will get back to you straight away.