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Solicitors told to take advantage of disclosure opportunity
Failure to disclose tax liabilities is likely to lead to far harsher penalties in the future
Solicitors could subject themselves and their firms to severe reputational damage if they fail to declare any outstanding tax payments.
The warning comes from DSH Chartered Accountants & Business Advisors, following the new Solicitors' Tax Campaign voluntary disclosure opportunity issued by HMRC on 8 December.
The campaign is an opportunity open to those working within the legal profession as a solicitor with undisclosed taxes and duties, to bring their tax affairs up to date or face tougher penalties in the future.
Steve Carpenter, director of taxation at DSH, commented: "Solicitors who do not take advantage of the opportunity and fail to disclose their liabilities face far harsher penalties if or when HMRC subsequently finds they have outstanding tax to pay.
"In the most serious cases they could find themselves in court, running the risk of their names being published in the press and subsequent damage to their personal reputation and that of their firm."
Under the voluntary disclosure opportunity campaign, solicitors have until 9 March 2015 to tell HMRC they would like to make a voluntary disclosure, and until 9 June 2015 to disclose and pay the tax they owe.
Carpenter added that those solicitors most at risk are likely to be sole traders, or those who are part of a small partnership, but those in larger firms should also work closely with their accountants to ensure that their affairs are in order.
"HMRC has run similar campaigns targeting a range of professions, including barristers in London, and has raised almost £1bn from voluntary disclosures and follow-up activity," Carpenter added.
"Solicitors should work with their accountants now to determine whether they need to declare their intention to take part before the March deadline."
Tax disclosure campaigns are launched when HMRC has evidence of large scale underpayment of tax in a particular sector of the economy.
Binyamin Ali is assistant editor of Private Client Adviser
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