A new tax initiative that was originally targeted at plumbers could benefit contractors from all industries, it has been claimed.

The Chartered Institute of Taxation (CIOT) stated that the offer is similar to a general disclosure opportunity and will allow those with unpaid tax to come clean and pay a reduced penalty rate.

Gary Ashford, chair of the CIOT's management of taxes sub-committee, said that while the terms are good it is essential that contractors talk to their tax solution providers to help them interpret the arrangement.

He recommended: "My advice to anyone who thinks they may be within range of this new facility … is to take it seriously and get professional advice."

Mr Ashford warned that the penalties for an incorrect self-assessed disclosure could be harsh, further highlighting the importance of getting help from a tax solutions provider.

The importance of using a reputable umbrella company was recently highlighted by HM Revenue and Customs' new Managing Deliberate Defaulters scheme.