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Introduction

Plumbers, gas fitters and heating engineers are being targeted by the tax authorities in a clampdown on tradespeople failing to declare their earnings and pay tax.

Under the tax plan, plumbers, gas fitters, heating engineers and members of associated trades, who have tax to pay which they have not yet told HM Revenue & Customs (HMRC) about, can come forward by 31 May to tell the department of their intention to disclose what they owe. If they make a full disclosure, most face a low penalty rate of 10 per cent, and there wil be a maximum of 20 per cent. They have until August 31 to make their disclosure and arrange for payment to be made.

After that date, using information pulled together from various sources, HMRC will carry out targeted investigations aimed at those who have failed to come forward and make a full declaration. Substantial penalties - up to 100 per cent - or even criminal prosecution could follow.

The Plumbers' Tax Safe Plan

The Plumbers’ Tax Safe Plan (PTSP) is the first initiative in a campaign focused on tradespeople. It is designed to make it easy for those in the plumbing industry to put their tax affairs right - and keep them that way.

Mike Wells, HMRC's Director of Risk and Intelligence, said:

“Our aim is to make it as easy as possible for plumbers to come forward, make a full disclosure and benefit from a reduced penalty.

We shall be using various intelligence sources to target plumbers who have not declared their full income. I strongly urge any in this group who think they may owe tax on their income to get in touch with HMRC and get their tax affairs in order simply, and on the best available terms.

This is the first step in enabling those with undisclosed income or gains to avoid a full tax investigation with much higher penalties. The message is clear: contact us before we contact you.”

Plan Timetable

The Plan operates in two stages:

• From 1 March to 31 May, plumbers can register with HMRC to “notify” that they plan to make a voluntary tax disclosure.
• By 31 August, those who have registered must have told HMRC about tax due and have made arrangements to pay any tax interest and penalties due. This is called “making a disclosure”.

How do Plumbers Let HMRC Know that they Intend to Make a Tax Disclosure?

•  Online by completing a notification form at Introduction to The Plumbers' Tax Safe Plan, or
•  Ring HMRC on 0845 600 4507 with details such as: name, address, National Insurance Number.

A dedicated team will be on hand to help. 

What is the Benefit to the Taxpayer in Using the Plan?

The benefit of the Plumbers' Tax Safe Plan is that those who make a full disclosure:

• Will be offered a simple and straightforward way to put their tax affairs right; and
• Will be charged a low penalty rate – (10 per cent for most who sign up, with a maximum rate of 20 per cent).

Notes

More details on how the Plan will operate, and the favourable penalty rates that should apply, can be found at Introduction to The Plumbers' Tax Safe Plan

[ Please do bear in mind that the Plan only deals with Income Tax and National Insurance: if you (or a partner) have incorrectly claimed benefits or Tax Credits during the period in question, the favourable terms of the Plan don't extend to these areas and you should consider your position very carefully - Ed. ]