Tax man sends warning letters to 50,000 electricians

Grant Prior 13 years ago
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More than 50,000 electricians will start receiving letters this month from HM Revenue & Customs warning them to pay any undisclosed taxes.

The sparks are being granted a special time-limited amnesty to pay any tax they owe with lower penalties.

The Electricians Tax Safe Plan is aimed at anyone who installs, maintains and tests electrical systems, equipment and appliances .

The campaign is based on a similar blitz against plumbers last year which led to ten arrrests and thousands of tax probes.

Marian Wilson, head of HMRC Campaigns, said: ”Our aim is to make it easy for electricians to contact us, make a full disclosure of income and face a reduced penalty.

”We are using a variety of intelligence sources to target electricians who have not declared their full income.

“This is the same method we used for the plumbers’ campaign, and that intelligence has led to 10 arrests and thousands of investigations, so we know it works.

”The information we are getting is from a wide range of sources, including online advertising, industry bodies, trade directories, professional ‘electrical safety’ certificates, trade suppliers and tax records.

“Using sophisticated software, this detailed information enables us to target those who should come forward and use the Electricians Tax Safe Plan.

”I urge tradespeople in this group who think they owe tax on their income to get in touch and get their tax affairs in order, simply and on the best terms.

”We do not think everyone who receives a letter owes us tax. However, if you owe tax and don’t get a letter, do not assume that HMRC will not catch up with you.”

Under the Electricians Tax Safe Plan, electricians can come forward at any time between 14 February and 15 May to tell HMRC they want to take part.

Once they come forward, they have until 14 August to make their disclosure and arrange for payment. If they make a full disclosure, most face a penalty rate of only 10%, with a maximum of 20%.

After 15 May, using information pulled together from different data sources, HMRC will investigate those who have failed to come forward.

John Cassidy, tax investigation and dispute resolution partner at PKF, said: “As with all previous sector specific tax amnesties, HMRC will have done sufficient homework on electricians to know who is likely to have underpaid tax.

“I suspect that electricians who are registered with industry bodies but have never sent in a tax return will be at the top of HMRC’s hit list for an enquiry or prosecution if they do not use this amnesty.

“HMRC is favouring the carrot over the stick – it is doing research to identify likely tax cheats and then giving them a final offer to put things right on relatively generous terms.

“It could collect more money through larger penalties if it simply raised enquiries without warning.

“So, while it will cost electricians to use this system to bring their tax affairs up to date, there is no doubt that this is a very good deal for anyone who may not have been entirely upfront with the tax man in the past.”

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