Q. In addition to my full time position as a teacher I also provide “private” lessons as an additional source of income at evenings and weekends. I have seen articles in the newspaper recently that H M Revenue & Customs (HMRC) are targeting tutors/coaches in their latest initiative on tax evasion. The newspaper articles talk about a Tax Catch up Plan (TCP). What is this and should I being doing anything under the scheme?

A. HMRC have launched a campaign to target private tutors and coaches who have undeclared tax liabilities. Whether you need to do anything under the TCP scheme depends on if you have already informed HMRC of your additional income on a self assessment return and paid any additional tax/NIC due.

The TCP is for people providing private lessons, regardless of whether they have a teaching qualification. It is aimed at those who profit from tuition and coaching, as a main or secondary income, on which the correct tax has not been paid because they have not told HMRC about it.
The opportunity is available to those providing tuition, instruction or coaching. This includes, for example, tuition of traditional academic subjects, fitness and dance instruction, musical instrument tuition, art, services provided by life coaches and others.

Under the plan, tutors and coaches have until 31st March 2012 to come forward and tell HMRC about their outstanding tax for the years up to 5th April 2010, and pay what they owe. HMRC say the plan is designed to make it simple for those affected taxpayers to put their tax affairs right and keep them on the right track in the future.

TCP works to a set timetable with different stages as follows:

– From 10th October 2011 to 6th January 2012, tutors/coaches/instructors must register with HMRC to “notify” that they plan to make a voluntary tax disclosure.

– By 31st March 2012 those who have registered to notify must tell HMRC what they owe and pay the tax, interest and penalties due.
HMRC have stated that those who come forward by the deadline are likely to receive the best possible terms for paying the tax owed. If they have to pay a penalty, it is unlikely to be more than 20 per cent of the unpaid tax.

Those that fail to take the opportunity offered to make a voluntary disclosure and wait for HMRC to come to them will find that they have to pay much higher penalties, or even face criminal prosecution. After 31 March HMRC will investigate those who have chosen not to come forward using information pulled together from different sources.

Marian Wilson, Head of HMRC Campaigns, recently said: “Our campaigns are designed to ensure tax is paid so that the money is available to spend on public services used by everyone. We are making it as easy as possible for people offering tuition and coaching to use this unique opportunity to put their tax affairs in order by making a full disclosure, and benefit from the best possible terms.

“We are using various intelligence sources to identify and then target those who do not take advantage of this opportunity to declare their full income. The message is clear: contact us before we contact you.”

This is the latest group to be targeted by HMRC as they strive to meet the target set by government of recovering an additional £7bn of tax lost through avoidance and evasion before June 2015. HMRC claim that previous schemes into offshore bank accounts, the medical profession and plumbers have been successful with arrests having been made in some cases.

Although the current scheme is aimed at tutors etc any one who has undeclared income can make a voluntary disclosure to HMRC in an attempt to minimise penalties.

If you do need to take the opportunity currently being offered then you can register online at http://www.hmrc.gov.uk/ris/tcup/index.htm – or by calling HMRC on 0845 601 8817. A dedicated team is ready to help, Monday to Friday, 08:00 until 19:30. It will be helpful to have your National Insurance Number and self assessment unique taxpayer reference (UTR) available if known. 

Before registering seek professional advice. If you need any further help or information you can also call our tax consultants on 01455 852550 who will be able to advise you.