Solicitors targeted by HM Revenue & Customs

HMRC has been targeting tax evasion in particular trades and professions and is now turning its sights on the legal profession.  Under the latest crackdown, called the Solicitors Tax Campaign, HMRC will be gathering information from various sources to identify lawyers who have not paid enough tax.  The campaign will also give solicitors the opportunity to approach HMRC before 9 March 2015 to bring their tax affairs up to date and receive the best possible terms.  HMRC claim to have collected over £1bn since its targeted crackdowns began five years ago and its investigations have led to criminal prosecutions and jail sentences of up to 10 years.

A crackdown on the Bar in 2012 resulted in high profile convictions against two barristers for VAT fraud.  In both cases, the barristers had their VAT registrations withdrawn by HMRC for failing to deal with VAT administration, but they still continued to fraudulently charge VAT to their clients using their withdrawn VAT numbers.

Any solicitors who have evaded tax should consider approaching HMRC before the March deadline to sort out their affairs. This could significantly reduce potential penalties and avoid a criminal or regulatory sanction.