Electricians have until 15 May 2012 to notify HMRC that they wish to sort out their tax affairs. The incentives for electricians to use the Electricians Tax Safe Plan (ETSP) are:
- The tax liability may be limited to the past 5 years;
- The penalty will normally be limited to 10% and certainly no higher than 20%; and
- Time to pay is available, if funds are not available to pay the overall liability.
It is possible to register online, by phone or by post; although with the deadline fast approaching it would be advisable to use the online and telephone options to ensure the deadline is met. Once registered, advisers have until 14 August 2012 to make the disclosure and pay any liabilities.
Advisers assisting their clients to make a disclosure should consider whether they need to go back more than five years to sort out the past (in case HMRC challenge whether the disclosure is complete). HMRC have been collating information on electricians and intend to investigate the people that appear to have not disclosed all their income. In the most serious cases, HMRC may decide it is appropriate to undertake a criminal investigation or offer the person the chance to disclose the additional income/gains via the Contractual Disclosure Facility (Code of Practice 9).
Promoted as a fresh start, the ETSP is an effective route for electricians to sort out the past.
If advisers have clients that are not eligible for the ETSP there are other options available to regularise the past.