HMRC - Private Tuition and Coaching Campaign (PT&C)

HMRC uses 'web robot'

HM Revenue and Customs (HMRC) is due to launch a disclosure campaign in Autumn 2011 which will target individuals who earn money from providing tuition and coaching services either as a main or a secondary income.

It covers people providing private lessons, regardless of whether they have a teaching qualification, and could include, for example, fitness/dance/lifestyle coaches through to national curriculum subject tutors and others. The exact format of the disclosure opportunity has not yet been finalised however it is expected to offer reduced penalties in return for voluntary disclosures.

HMRC has already started approaching language schools, distance learning companies and educational colleges providing vocational courses requiring them to ‘make and deliver returns of payments for particular services that you have made to recipients who are not your employees’. It is anticipated that other organisations and businesses will be approached for information including tutoring services, sports centres and swimming pools. The legislation exists for HMRC to demand the production of these details and once it is provided HMRC will be able to establish whether any individuals have failed to disclose income and attempted to evade tax. 

Inspectors will also be using cutting-edge tools such as “web robot” software to search the internet and find targeted information about specified people and companies. Using the software, HMRC can pinpoint more accurately people who have failed to pay the right tax. The “web robot” intelligence when combined with the department’s ‘Connect’ computer system has already been instrumental in identifying people who are trading without telling HMRC.

HMRC officers are likely to launch formal enquiries where individuals do not take advantage of the voluntary disclosure procedures and these are likely to result in greater penalties where income has not been declared. The recovery of any taxes will be from the individual and it is understood that HMRC will be pursuing these for the tax years 2008/09 through to 2010/11, together with interest and penalties.

If you have any questions regarding the above, please get in touch with your usual Johnston Carmichael contact, or our Head of Tax, Graham Seager, 0131 220 2203, graham.seager@jcca.co.uk.

For more information on the Tax service we offer and our specialist Tax team - visit our Tax area.