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Mark McLaughlin considers HMRC's developing strategy for targeted tax "amnesties".

HM Revenue & Customs (HMRC) recently announced various new campaigns targeting 'tax cheats' during 2011/12, beginning with traders operating above the VAT turnover threshold but who have not registered for VAT. HMRC will later be turning its attention to those who provide private tuition and coaching, 'e-marketplace' traders and tradespeople (see our news item on the subject: HMRC Extends Tax "Cheats" Campaigns)

One assumes that when these campaigns are launched, HMRC will be offering broadly the same favourable terms to the specific categories of businesses being targeted as were offered to plumbers in the 'Plumbers' Tax Safe Plan' (PTSP), in terms of lower penalties for coming forward and making a full disclosure to HMRC of undeclared income.

HMRC's policy of targeting specific business sectors and enticing them with lower financial settlements is no doubt a sensible strategy from HMRC's perspective, in terms of the tax, interest and penalties generated from the campaigns. However, this whole area of HMRC campaigns is starting to get a little confusing. For example, during the plumbers' campaign, HMRC indicated that non-plumbers would be offered similar terms if they came forward voluntarily. Will the same apply when other business sectors are targeted? Or would those who wish to 'come clean' immediately be better off waiting until HMRC launch a campaign into their own category of business?

Opening regular windows of disclosure opportunity to everyone would probably not work, because the natural tendency would be to wait for such a window to come along. But occasional, general 'amnesties' might be effective. And if HMRC discover non-compliant business sectors in the interim, there is no reason why HMRC should not conduct publicity campaigns warning that those sectors will be targeted, but this time without the promise of a better deal. After all, if these sectors are actually among the worst tax offenders (and one assumes that HMRC has accurate information to this effect!), why should they benefit?

It is an interesting debate.