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August 2011

Plumbers Tax Safe Plan - only a couple of weeks left to stop the leak

Plumbers, gas fitters and heating engineers have only one month left to tell HM Revenue and Customs (HMRC) about tax that they owe and to make arrangements to pay any interest and penalties due.

They were offered a special tax plan to put right their tax affairs in March this year. HMRC then began using information held on people working in the plumbing industry to clamp down on those who have chosen not to come forward and take advantage of the Plumbers Tax Safe Plan (PTSP).

Since June, HMRC has been using information gathered from many different sources to open investigations into hundreds of people who have failed to come forward. In addition to penalties, defaulters can face criminal prosecution.

Under the PTSP, plumbers, gas fitters, heating engineers and members of associated trades who owed tax that they had not declared faced a penalty rate of only 10 per cent, with a maximum of 20 per cent. They have until 31 August to arrange for payment.

Once this disclosure opportunity closes, taxpayers who have not come forward but are found to have unpaid tax liabilities will face higher penalties, rising to 100 per cent of the tax evaded or, potentially, criminal prosecution.

HMRC has left the PTSP disclosure route open for those in the plumbing industry with unpaid tax who still wish to come forward, although they may not receive exactly the same terms as under the plumbers plan.

HMRC campaigns have so far raised more than £500m from voluntary disclosures and a further £100m from follow-up investigations. Campaigns have targeted offshore investments, medical professionals and those trading above the VAT turnover threshold but who have not registered for VAT.

HMRC has used legal notices and new technology to gather and analyse data from industry bodies, tax records, advertising directories and Health and Safety prosecutions. This detailed information will be used to contact and then pursue people who should come forward and use the PTSP. Anyone HMRC catches up with who could have used the PTSP is likely to face greater costs than if they came forward voluntarily, as well as running the risk of prosecution.

Update: 18th August 2011

5 Plumbers arrested:  http://www.bbc.co.uk/news/business-14545770