What are HMRC campaigns and disclosure opportunities?

There has been a dramatic sea change in HMRC’s compliance approach in recent years, with HMRC campaigns or tax amnesties being very much at the forefront. In fact, the department now has dedicated HMRC campaigns teams. HMRC campaigns are generally sector or industry specific, focusing on as HMRC put it, the “significant minority who are not paying the correct taxes”.

The department run HMRC campaigns or tax amnesties to prompt those taxpayers with undisclosed income or gains to come forward voluntarily. Essentially HMRC adopts a “carrot and stick” approach.

FIRST THE CARROT

Come forward and make a voluntary disclosure and in return:

  • HMRC will almost certainly not prosecute
  • You will receive a greatly reduced, generally fixed, penalty

SECOND THE STICK

Miss the amnesty or HMRC campaigns deadline for any reason and you face:

  • A criminal prosecution if the conduct is deemed serious enough
  • A much more punitive financial penalty, up to and sometimes exceeding 100% of the overall tax loss to the exchequer

CAMPAIGNS LAUNCHED TO DATE

  • Offshore Disclosure Facility
  • New Disclosure Opportunity
  • Liechtenstein Disclosure Facility
  • Tax Health Plan
  • The Tax Catch Up Plan
  • Plumbers Tax Safe Plan
  • Electricians Tax Safe Plan
  • The E-markets Disclosure Facility

WHAT IS THE HMRC CAMPAIGN PROCESS?

Phase 1
HMRC campaigns will use their formal powers to obtain information from third parties. These are otherwise known as third-party information requests. At this point, HMRC campaigns are seeking to identify “risk” cases. In other words, those cases where tax may have been underpaid.

Phase 2
HMRC campaigns offer those taxpayers who themselves consider tax may have been underpaid, the opportunity to come forward under amnesty. Those who do come forward of their own volition are offered favourable or reduced penalties, which are generally fixed.

Phase 3
Those who do not come forward face a formal HMRC tax investigation, which will either result in a criminal prosecution or entirely more punitive penalties. A formal tax investigation can also occur if HMRC feel that an incomplete or inaccurate disclosure has been made.

USE A TAX INVESTIGATION PROFESSIONAL TO GUIDE YOU THROUGH THE HMRC CAMPAIGNS & AMNESTIES PROCESS

Appointing the right tax investigation specialist will save you time, heartache and money. Admiral Tax offers a comprehensive range of tax investigation services, ensuring that you get the right tax investigation advice you need.

Further reading: