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Taxing times ahead for tutors as Revenue eyes up #163;42bn shortfall

Thousands of teachers are facing investigation by tax inspectors who are about to launch a crackdown on tutors who cheat the public purse.

Her Majesty's Revenue and Customs (HMRC) is pursuing teachers who work as private tutors but do not pay the correct amount of tax on what they earn.

The initiative, which will begin in the autumn, is part of an effort by Treasury officials to plug a #163;42 billion tax gap - the shortfall between what the Revenue collects and what it estimates is due. A similar drive against doctors and dentists has yielded #163;10 million.

One medic had to pay an additional #163;1 million while a dentist received a #163;300,000 tax bill.

An HMRC spokesman said it estimates that as many as 70,000 teachers undertake tutoring in their spare time and many get paid in cash.

HMRC director of risk and intelligence Mike Wells said: "By being open about our areas of interest for the coming year we hope to maximise that exchange of information and ensure we reduce the tax gap.

"We will use the information we gather to pursue people who choose not to use the opportunities we provide for them to put their affairs in order on the best possible terms. It will be more expensive if we come and find people."

The personal tax threshold is #163;7,475 and a HMRC spokesman said teachers needed to remember that they have to pay tax on all their cumulative earnings. The Revenue has defined private tutoring as the provision of private lessons, regardless of whether the tutor has a teaching qualification, and includes a range of teachers such as fitness coaches through to national curriculum subject tutors.

Some specialist tutoring firms have already received letters from the HMRC's Risk and Intelligence Service unit asking them to provide details of payments to people who are not classed as employees.

The letter, seen by The TES, ends: "This is not a check of your tax affairs - we will use this information to check that the recipients have paid the right tax."

The head of one specialist agency, who asked not to be named, said: "The Revenue see this as a bit of a loophole. They're shaking every tree for money and this is the first time we've had anything like this."


'Paid in cash'

One teacher, who asked not to be named, queried how much the Revenue would collect from its latest campaign.

The English teacher charges #163;20 an hour for private tutoring, which she said was mainly confined to GCSE and A-level students.

"I do it from time to time, and there are a few others I know who do it. But generally a lot of teachers wouldn't do it because they don't have the time in the evening - they have a pile of marking to do instead."

The teacher said she also helps foreign-born people to improve their English-speaking skills and charges for additional costs, including petrol and materials.

"I normally get paid in cash, the occasional cheque," she said. "I don't think this crackdown will affect me much because I don't earn enough."

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