Tutors, coaches and instructors - don’t lose out on the best terms to catch up on your tax

Private tutors and coaches who have undeclared tax liabilities are being encouraged to put their tax affairs in order or face tough penalties, as part of a campaign clamping down on those in this sector who do not pay what they owe.

HM Revenue & Customs (HMRC) is offering people who have undeclared income from providing private and/or self-employed tuition, instruction or coaching a unique time-limited opportunity to bring their tax affairs up-to-date, on the best possible terms - the Tax Catch Up Plan.

Under the Tax Catch Up Plan, private tutors and coaches have until 31 March 2012 to come forward and tell HMRC about their outstanding tax for the years up to 5 April 2010 and pay what they owe. The plan makes it easy for customers to put their tax affairs right and then keep them that way in the future.

Those who come forward by the deadline will receive the best possible terms. This means that if they have to pay a penalty, it’s unlikely to be more than 20 per cent of the unpaid tax. Those who wait for HMRC to come to them will find that they have to pay much higher penalties or even face criminal prosecution.

The opportunity is aimed at those who have undeclared tax liabilities from providing private and/or self-employed tuition, instruction or coaching; for example private tuition of traditional academic subjects, fitness and dance instruction, musical instrument tuition, art, services provided by life coaches and others - this is an opportunity to come forward, declare and settle any unpaid tax.

The Tax Catch Up Plan has two stages.

• From 10 October 2011 to 6th January 2012 private and/or self-employed tutors/coaches/instructors with undeclared tax liabilities must register with HMRC to “notify” that they plan to make a voluntary tax disclosure.
• By 31 March 2012 those who have registered to notify must tell HMRC what they owe and pay the tax, interest and penalties due.

After the deadline has passed, HMRC will use data from an extensive range of sources to identify those who should have but have failed to come forward and make a full declaration. HMRC uses advanced technological tools such as 'web robot' software which helps it identify people offering such private tuition or coaching services but who have failed to pay the right tax. Those identified face substantial penalties or even criminal prosecution.

If you have clients affected by these issues or who need to make a disclosure of unpaid tax liabilities and would like to discuss how to proceed, please don't hesitate to contact us.