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UK's Higher Rate Taxpayers Warned

by Robert Lee,, London

06 September 2012

The UK's higher rate taxpayers have less than one month to take part in an amnesty campaign that offers lower penalty rates to those who have in the past failed to submit tax returns.

The Tax Return Initiative was launched in July. It is aimed at Self Assessment (SA) taxpayers liable to pay tax at rates of 40% and above who have not submitted their tax return for the 2009/10 and earlier tax years. The campaign is however also available to anyone who has tax returns to submit for these years.

Taxpayers have until October 2 to tell HM Revenue and Customs (HMRC) that they wish to take part. Completed returns must also be sent to HMRC, and the tax and National Insurance Contributions (NICs) owed paid, by the October 2 deadline. HMRC will offer those who come forward voluntarily better terms and lower penalty rates than would otherwise be the case.

HMRC will soon send out reminder letters to those who have not yet indicated their intention to take part. HMRC has warned that it will come down hard on those who fail to take advantage of the amnesty. It says it will use its legal powers to pursue outstanding returns and any unpaid tax and NICs. Penalties of up to 100% of the tax due, or even criminal investigation, could follow.

HMRC campaigns have so far have collected nearly GBP510m (USD810m) through voluntary disclosure, with more than GBP120m generated from follow-ups. Over 18,000 investigations have been completed and 23 criminal cases are under way. Previous campaigns have targeted offshore investments, medical professionals, private tutors and coaches, plumbers, electricians, value-added tax defaulters and online traders.

TAGS: compliance | tax | tax compliance | tax incentives | revenue guidance | United Kingdom | offshore | professionals | tax rates | HM Revenue and Customs (HMRC) | revenue statistics | HM Revenue and Customs (HMRC) | trade | individual income tax

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