HMRC amnesty for riding instructors to sort out their tax affairs
HMRC has announced a Tax Catch up Plan (TCP) for private tutors who are still avoiding their tax liabilities following a major clampdown earlier in the year.
Riding instructors who give private lessons and receive cash-in-hand payments could particularly benefit from the terms of the amnesty which is being offered to everybody who profits from tutoring or coaching.
HMRC’s 2011 campaign has focused on both VAT and income tax using sophisticated new technology to pinpoint people.
Ruth Corkin, VAT Manager at James Cowper said: “Over the summer HRMC has continued to focus on those who earn a living from riding tuition and who supplement their income by giving regular lessons. Under the plan, instructors have until 31 March 2012 to tell HMRC about their outstanding tax for the years up to 5 April 2010, and pay what they owe.”
Ruth adds: “Equine tax affairs are notoriously complicated, and it is all too easy to move from enjoying a hobby with the occasional lesson to help fund it, to running a business. The best way to ensure that tax affairs are on track is to maintain records and keep them up to date. Those who wait for HMRC to come to them could face much higher penalties or even criminal prosecution so it’s prudent to start to tackle any issues now.”
James Cowper advises riding instructors who believe that they may have an outstanding tax liability to take the opportunity presented by the amnesty but first speak with their accountant or tax adviser.
Ruth explains: “Although HMRC is offering what they describe as the best possible terms, I would always recommend that individuals who believe they owe tax seek advice from their accountant or tax adviser before making a declaration, as otherwise a larger tax bill and penalty than necessary could be charged.”
In the first instance instructors, coaches and tutors have until 6 January 2012 to register with HMRC to “notify” that they plan to make a voluntary tax disclosure.
Ruth Corkin, VAT Manager, James Cowper LLP +44(0)1865 200500 or email rcorkin@jamescowper.co.uk
19.10.11