Employment Tax Expert

In light of current tax investigations by HMRC, it is worth reminding you guys of the ability of HMRC to Name and Shame Tax Evaders

HMRC can publish the following information, unless doing so would prejudice an ongoing criminal investigation or cause serious risk to the taxpayer’s safety:

- The taxpayer’s name (including a trading name or pseudonym);
- The taxpayer’s address or registered office address;
- The nature of the taxpayer’s business;
- The amount of the penalties charged and the tax involved;
- The periods when the errors arose; and
- Any other information that HMRC considers necessary in order to make the taxpayer’s identity clear.

Taxpayers cannot appeal against the decision to publish their details, although they can appeal against the imposition and level of the penalty.

However, HMRC will not publish a taxpayer’s details if the tax they deliberately evaded is less than £25K or if the taxpayer voluntarily tells HMRC about the errors before HMRC begin a compliance check.

HMRC Tax Investigation into plumbers has begun in ernest

Five plumbers have been arrested and around 600 are under civil investigation by HM Revenue & Customs (HMRC) for failing to pay the right amount of tax.

The arrests and investigations have taken place during a campaign targeting plumbers which invited them to put their tax affairs in order. Some of those involved owe up to £150,000.

This is the start of co-ordinated action and more raids are expected to take place over the coming weeks across the UK, including Yorkshire, Kent, Cambridgeshire, Tyne & Wear, Midlands and South Wales.

John Pointing, Assistant Director, HMRC Criminal Investigation, said:

“These raids and arrests of ‘ghosts’ – people who have not declared income from the work they do – are the culmination of months of work by HMRC.

“We provided a chance for those we have arrested, and the 600 we are investigating, to come forward voluntarily and put things right. These arrests send a clear message that HMRC will take action against those who choose not to come forward and pay the tax they owe.”

Mike Wells, Director HMRC Risk & Intelligence Service, said:

“These arrests are just the start. HMRC is considering hundreds of further cases for criminal investigation in the plumbing and medical professions. Some people may have thought we were bluffing when we said we have information that we will use to prosecute tax evasion.”

Under the Plumbers Tax Safe Plan (PTSP), plumbers, gas fitters, heating engineers and members of associated trades who owe tax that they had not declared faced a penalty rate of only 10 per cent, with a maximum of 20 per cent if they disclose in full. They have until 31 August to arrange for payment.

If you are worried about these developments call us today on 0800 917 9176

New tax investigation campaigns targeting VAT defaulters, private tutors and e-marketplaces will be launched by HM Revenue & Customs (HMRC) over the next year.

HMRC will use cutting-edge tools such as “web robot” software to search the internet and find targeted information about specified people and companies. Using the software, HMRC can pinpoint more accurately people who have failed to pay the right tax. The “web robot”, used with the department’s Connect computer system, also helps find people who are trading without telling HMRC.

Connect alerts HMRC to previously invisible tax evasion by matching a vast amount of HMRC and third-party data, enabling a fast and focused response to tax evasion. It shines a light onto previously hidden relationships, uncovering anomalies between such elements as bank interest, property income and lifestyle indicators before homing in on unexplained inconsistencies.

HMRC announced last month that a campaign targeting VAT rule-breakers trading above the £73,000 turnover threshold but who have not registered for VAT will be launched in the summer.

Other campaigns that will be launched in 2011/12 will focus on:

* Those who provide private tuition and coaching. This addresses the risk posed by all professionals who, because of their field of expertise, are able to earn money from providing tuition and coaching – either as a main or a secondary income. It covers people providing private lessons, regardless of whether they have a teaching qualification, and could include, for example, fitness/dance/lifestyle coaches through to national curriculum subject tutors and others.

* E-marketplaces. This will cover those who are using e-marketplaces to buy and sell goods as a trade or business and who fail to pay the tax owed. People who only sell a few items and who are not traders are unlikely to be liable to tax and will not be targeted by this campaign.

* Trades. This will build on HMRC’s plumbers’ campaign and give an opportunity to another group of tradespeople to come forward and declare unpaid tax.

Mike Wells, HMRC’s Director of Risk and Intelligence, said:

“We want to make sure HMRC listens to as many informed views as possible for our future campaigns. We want the views and experience of people and organisations outside the department to play a fuller part in the campaigns that we design for customers.

“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 and help customers pay what they owe.

“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, so I urge them to come forward and disclose voluntarily.”

So far, more than £500m has been raised by HMRC from voluntary disclosures and a further £100m from follow-up activity. Previous campaigns have targeted offshore investments, medical professionals and people working in the plumbing industry.

HM Revenue & Customs (HMRC) has announced trials of a Single Compliance Process for tax enquiries across a range of taxes.

By simplifying and standardising the process for compliance checks HMRC believe they will “improve customer experience” and reduce costs as the check will only take as long as the risks and behaviours encountered dictate. Mmmm, call this employment tax expert a bit of a cynic but this single tax process has been tried before and this “new” idea is somewhat open ended

The trials of the new process will run for six months from 20 June 2011 (put back from 1 June 2011) in 10 different locations across the UK:

Reading/Slough,
Newcastle,
Warrington,
York,
Exeter,
London Euston and
Southampton in England;
Cardiff in Wales;
Belfast and
Edinburgh/Dundee.

The new process will be rolled out nationally from January 2012, subject to the results of the trials, so not pre empting anything there then!

David Gauke, Exchequer Secretary to the Treasury, said:

“This Government is committed to relieving the burden on businesses. We know that agents, individuals and businesses find some of HMRC’s current compliance practices drawn out and costly. A Single Compliance Process could help HMRC improve the customer experience and reduce costs.

HMRC is working directly with agents via the Compliance Reform Forum to help develop it, and will continue to work with them during the pilots.”

The Single Compliance Process will focus solely on the risks and behaviours identified in cases and throughout the life of the compliance check, irrespective of the head of duty (VAT, Income Tax, Corporation Tax and PAYE) involved. The process will be capable of addressing lower risk cases at an appropriate level, but will also increase in intensity should the approach be warranted.

HM Revenue & Customs has confirmed it is taking on an extra 100 officers to target tax abuses in the construction industry.

HMRC said it is doubling the number of specialist officers cracking down on labour providers who fail to pay tax.They are expected to bring in an additional half a billion pounds of tax across all business sectors over the next four years. Labour providers found guilty of tax evasion could face jail.

David Gauke, exchequer secretary to the Treasury, said: “This government has invested £900m in HMRC to crack down on people who break the rules. Expanding these teams will help make sure that we bring in the additional money that the UK needs. Labour providers who think they can exploit their staff and the tax system need to think again.”

Mike Eland, HMRC’s director general of enforcement and compliance, said: “Building on HMRC’s successful approach to tackling fraud in the labour provider industry, these teams will make it even harder for fraudsters.

“Labour providers are traditionally found in agriculture and construction where they supply workers to other businesses. But HMRC will also continue to focus its efforts on all sectors where there is a demand for a flexible workforce to meet seasonal and market demand such as leisure, food, transport, security and cleaning.

“We will tackle fraud by those employers who don’t play by the rules and the organised crime gangs who exploit their workers. We will also work collaboratively with labour users and businesses in these sectors to help them use legitimate providers. This will help to create a level playing field for compliant businesses to compete in the market place.”

This employment tax expert warns companies that there are many labour providers in the Construction Industry who are not legitimate and will cause you more problems than if you engaged the subcontractors on truly self employed terms