A tax amnesty for escorts?

The Revenue have a scheme running at the moment for plumbers who have underpaid their tax and want to make a fresh start without risking crippling penalties or criminal prosecution.  The basic idea is that if they fully disclose their unpaid tax now they get lower penalties, time to pay if they need it, and no risk of an investigation. 

So it’s good news for the minority of escorts who moonlight as plumbers and heating engineers, but what about everybody else?

Although the Plumbers Tax Safe Plan is aimed squarely at plumbers the documents make it clear that it applies to other professions too.



What if I’m not a plumber but I want to get up to date with my tax?

If you are not a plumber, you may still find that the forms cover everything you need to tell HMRC. If that is the case, you can still use PTSP forms. You should notify and disclose following the instructions in this guidance. Please ensure that you show your correct business or trade on the forms, making clear that you are not a plumber. If you don’t provide this information your disclosure could be sent back for completion.

Customers who voluntarily come forward and put right their tax position can expect very similar terms to those on offer through PTSP. If you do not come forward and HMRC later find that you owe additional tax, you may face higher penalties or even criminal investigation.

Why would you want to take advantage of this amnesty?

1. The penalties are much lower. When tax is underpaid HMRC have the right to collect not just the unpaid tax (with interest) but also penalties, which can be up to 100% of the tax. Underpaying tax by £10,000 could result in a bill for £20,000 – plus interest. Under the PTSP the penalties will be zero if the underpayment arose from a  mistake, 10% if it arose from carelessness, and 20% if it was deliberate but not concealed. Deliberate concealment will still attract a 100% penalty, but a good accountant should be able to argue your circumstances into one of the lower categories.
2. If your sin is a mistake you will only have to go back over the previous 3 years, and for carelessness 5 years. But a full blown tax investigation could go back over 20 years.
3. Time to pay. The Revenue are promising to agree sensible instalment plans for clearing tax arrears.
4. Disclosing the information yourself is going to far, far cheaper and less stressful than responding to the questioning of a tax investigation – even if you use an accountant.

But if you want to take advantage of the amnesty you’ll have to act fast. You need to tell HMRC by 31 May that you plan to make a disclosure, and then submit the full details by the end of August.

So if tax nightmares are disturbing your sleep there could be no better time to consult an accountant.

PS. It’s not just my view that the amnesty is open to those of us who wouldn’t know a ballcock from a grease nipple. The Tax Faculty of the Institute of Chartered Accountants agree with me (which is always nice) and if you google Plumbers Tax Safe Plan you can see what the accountancy firms are saying.