THE fact that last year saw Her Majesty's Revenue and Customs (HMRC) launch an amnesty for GPs and other medical professionals to come forward with any non disclosed earnings probably passed most readers by.

Why should a plumber in Plawsworth or a gas fitter in Guisborough care if the taxman was chasing a few men in white coats who had failed to hit the mark with their returns?

What might not have been obvious is that HMRC appears to be working its way through the professions and 2011 has seen The Health Plan amnesty followed by the Plumbers' Tax Safe Plan (PTSP).

Plumbers' Tax Safe Plan – it sounds harmless, doesn't it? Almost like something your accountant might advise.

In fact, if you do qualify, your accountant or tax advisor would almost certainly advise you to at least consider whether you should take it up, but not because it is a way of sheltering funds from the tax man – rather it is a way of avoiding a heavy penalty for failing to disclose income.

The PTSP targets plumbers, gas fitters, heating engineers and members of associated trades, who have tax to pay, which they have not told HMRC about.

People should come forward by May 31, 2011, and provide full details by the end of August.

Essentially, the aim is to crack down on tradesmen who may not be recording all their earnings and consequently paying less tax than they should.

So what if they don't come forward? HMRC claims they will be using various powers for obtaining information and intelligence they have gained over the past year or so to target those who have not declared their full income.

In addition to using information, HMRC may also compare declared income to projected turnover, based on certain business criteria, for example, hourly rates.

If there appears to HMRC to be a shortfall, by using their standard industry tests, they are likely to target those persons for enquiry.

This leads us on to what could happen should these earnings not be declared during the amnesty.

Essentially, not coming forward and being caught will result in a penalty rate of up to 20%, with those found to be concealing undisclosed earnings facing much higher punishment.

However, if you do use PTSP to make a voluntary tax disclosure, you are more likely to receive a lower rate penalty of 10%.

In short, if you are reading this and starting to feel a little uncomfortable, it's probably worth getting in touch with a tax specialist and preparing to face the music.

For more information on Constructing Excellence in the North East, please contact chief executive, Catriona Lingwood, on 0191 374 0233 or catriona@cene.org.uk.

Chris Leslie, director, Qubic Associates.