Both solicitors who are self-employed and those who work within a partnership or a company are being directed to declare undisclosed income and bring their tax affairs up to date as part of a new crackdown by HM Revenue and Customs (HMRC).

HMRC has claimed that it has sufficient evidence to target solicitors for regularly unpaid taxes from legal aid information as well as data from other third parties.

It has been outlined that solicitors who come forward willingly will receive lower penalties than those they have to pursue.  HMRC has stated that those who do not come forward voluntarily could face penalties of up to 100% or more of the tax owed, or further yet, criminal prosecution.

Members of the legal profession who are in this position have a short window to rectify their affairs – they need to fill in a notification form with HMRC by 9 of March 2015 and fill in a disclosure form and pay taxes owed by 9 June 2015.

Frank Strachan, Edwin Coe’s Head of Tax commented, “Yet another case of industry specific targeting by HMRC. If you consider the detail of information provided in relation to legal aid costs which is held by HMRC and the ability of HMRC’s CONNECT system to identify undisclosed sources of income, the weight is firmly in HMRC’s favour.”

Edwin Coe LLP provides specialist advice to clients who seek to disclose historic tax liabilities to HMRC and will be able to assist with any potential HMRC negotiations regarding penalties.

For more information from HMRC on this matter including where to find the relevant forms please visit:  https://www.gov.uk/solicitors-tax-campaign

If you require further information about this topic please contact a member of our Tax team.

Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.

Edwin Coe LLP is a Limited Liability Partnership, registered in England & Wales (No.OC326366). The Firm is authorised and regulated by the Solicitors Regulation Authority. A list of members of the LLP is available for inspection at our registered office address: 2 Stone Buildings, Lincoln’s Inn, London, WC2A 3TH. “Partner” denotes a member of the LLP or an employee or consultant with the equivalent standing.

Please also see a copy of our terms of use here in respect of our website which apply also to all of our blogs.

Latest Blogs See All

Share by: