Partner Article

9 March tax disclosure deadline looms for solicitors

Solicitors with tax affairs which are not up to date, including those with undisclosed taxable income, have until 9 March 2015 to notify HMRC of their intention to take part in the disclosure facility. Income and gains from all sources are relevant, for example, employment, business and investment.

If solicitors meet this date, they may be able to negotiate for tax payments to be spread over the year, rather than paying outstanding tax at once. Additionally, and where the underpayment is due to careless error, they may be liable for tax payments going back just six years, ie from 6 April 2007 to 5 April 2014, rather than a full 20 years which is relevant in more serious cases.

“It is important that solicitors take tax disclosure seriously and comply with HMRC’s deadlines as the tax authorities are threatening to name and shame those who ignore the facility. This is not an empty threat as HMRC has in the past released details of certain tax offenders to the press,” warned Andrew McKenna , partner and head of tax investigations at the Manchester office of Smith & Williamson, the accountancy and investment management group.

He explained: “Solicitors need to bear in mind that HMRC is equipped with copious detail, including for example, legal aid payments, which it can compare with solicitors’ self-assessment tax records to consider whether individuals have made complete tax returns.”

While solicitors should tell HMRC by 9 March 2015 that they intend to come forward under the facility, they have until 9 June 2015 to provide full details. The rules apply equally to solicitors working as sole practitioners as well as those in partnership or employed in corporate structure.

“My advice is simple. If you have undeclared income of any origin, it’s better to come forward than wait for HMRC to reach you,” concluded Andrew.

This was posted in Bdaily's Members' News section by Smith & Williamson .