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A partial amnesty is in the offing for the middle-class taxpayers who would declare their unpaid bills before October.

Date: (4 July 2012)    |    

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Those who come into the higher tax rate bracket and have not yet completed their self-assessment forms would have to declared any untaxed income they had earned before 2010 and those who are willing to come forward will only face a reduced penalties of £200, as well as a fine amounting to 10 per cent of their unpaid tax.
Fines are usually up to 100 per cent of unpaid tax; while, on the spot, fines of more than £1,000 can be levied.
This ‘Tax Return Initiative’ is in the hope of help recovering hundreds of millions in unpaid taxes as was the case in previous amnesty schemes. But the critics have said that it was ill conceived.
Any taxpayer who refuses the last change offer will face aggressive criminal prosecutions from HM Revenue and Customs.
HMRC are writing to taxpayers who are on the 40 per cent of 50 per cent rate but who have failed to comply with a request to fill in a self-assessment tax return for 2009-10 or earlier.
It fears that many would have 'gone to ground' and was determined to hold them to account. Tens of thousands of people could be affected.
More than £500million in tax has already been recovered thanks to campaigns against groups like hospital consultants, home tutors, plumbers and eBay traders.
Payments could be made from today from the HMRC website, and the amnesty has given a deadline of October 2.
Campaign Manager of the TaxPayers’ Alliance Robert Oxley, said such amnesties would not be needed if the Revenue simplified its clumsy tax code.
He said that the HMRC spent too much time chasing down unpaid tax because of the overly complex and loophole-ridden tax system which it was trying to get grip on.
Reform of the cumbersome tax code was needed to avoid such problems which are bound to recur at the end of every financial year.
John Cassidy, a tax investigation and dispute resolution expert, said the offer of the amnesty meant HMRC were 'throwing money away'.
But the HMRC regards its recent tax campaigns and amnesties as successful because they have brought in revenue without the administrative work of traditional enforcement activities.
The new initiative comes as Whitehall's watchdog is being pressed to launch an investigation into tax avoidance by the wealthy.