Electricians face shock treatment over taxes

Gary Ashford
CIOT
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Post date: Tuesday, 14th February 2012

HMRC has announced today that 50,000 letters are to start going out to electricians encouraging them to get their tax affairs in order under the Electricians Tax Safe Plan.

Electricians who take advantage of this ‘disclosure opportunity' will face a penalty rate of only 10-20% of the tax owed, in addition to the tax itself, rather than the usual rate of up to 100%. Those who don't come forward could ultimately face criminal charges.

Electricians with dodgy connections in their tax affairs should come forward if they want to avoid getting a nasty shock from the taxman, says Gary Ashford, who represents the CIOT on HMRC's Compliance Reform Forum, and is National Head of Tax Investigations and Dispute Resolution at RSM Tenon.

This campaign should spark some interest among electricians. HMRC's efforts to identify those who are evading tax have become increasingly sophisticated.

It is clear from the follow-up of the plumbers' campaign, which has now led to 10 arrests, that they are determined to stem the flow of potential tax revenue into the hidden economy and meet their target of bringing in an extra £7 billion over the Parliament through initiatives to tackle tax avoidance, evasion and fraud.

The advice to any electrician who is worried that they have been underpaying tax - whether deliberately or in error - is clear: Don't blow a fuse - but don't remain static either.

Better to pay a nasty charge from your current account now rather than risk a shock through a criminal charge in a few months.

Anyone who is worried that they have been underpaying tax - whether deliberately or in error, and whether they are connected to this campaign or not - should get plugged into professional advice without delay.

Penalties will generally be at a lower rating for taxpayers who come forward voluntarily to put their affairs in order with HMRC. 

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