Employment Tax Expert

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

How many seemingly straight forward changes in forms from HMRC carry the potential for information collation leading to a tax investigation?

Well, later this year you will find that your solicitor, or property conveyance person, will be required to file new forms with the Stamp Duty Land Tax Office when you buy a property. After 4 July 2011 new forms need to be filed and you need to be aware that the devil is in the detail!

The new forms require that each lead purchaser provide the following unique identifier when completing the forms:
• Individuals – their National Insurance number, or
• Companies and Partnerships – their Unique Tax Reference (UTR) or VAT registration number.

So be warned HMRC will be setting up tracking processes that could find you walking straight into an HMRC tax investigation

Despite HMRC announcing that they would report on the outcome of the Business Records Check consultation on 31 March, we have seen the first letters being issued by HMRC, trying to arrange a meeting to carry out a Business Records Check (BRC).

The consultation stated that the BRC programme would start in Autumn of this year with 50,000 Checks per year being carried out. However, we have seen letters dated 21 March 2011 which clearly relate to the BRC programme.

We have been told by an HMRC contact that there are 4-5 offices issuing the letters, including Blackburn and Plymouth, and that taxpayers from specific geographical locations are being targeted. Areas mentioned initially include Sheffield, Oxford, Swindon, Stockport and Scotland. Based on the information we have received, we estimate that at least 1,500 letters could have been issued. This employment tax expert says do not be fooled by these visits they are real time employer compliance visits so if you receive notification contact us

HM Revenue & Customs (HMRC) has launched a campaign to target and crack down on suspected fraudulent tax credit claims from the self-employed.

Letters have started to land on the doorsteps of 12,000 self-employed people who are claiming tax credits. HMRC teams have been examining tax credit awards being paid to the self-employed and are writing to any whose claims may not be genuine or accurate. They are asked to contact the department and supply evidence to support their claims.

Failure to tell HMRC promptly of any changes in income can result in overpayment, which means that claimants have to pay back the money. They could also face a penalty and, in the case of deliberate fraud, criminal prosecution and imprisonment.

As part of a wider government crackdown, HMRC and the Department for Work and Pensions (DWP) have published a strategy designed to tackle error and fraud in benefits and credits.

Exchequer Secretary to the Treasury David Gauke said:

“HMRC is determined to take a tough approach to targeting possible fraud among tax credit claimants. Last year the Government launched radical proposals to reduce the billions lost to tax credit error and fraud every year. These losses are unaffordable and unacceptable.”
HMRC will now use credit reference agencies and data-matching to spot patterns of fraud. The department is also employing additional investigators and are examining each claim in high-fraud areas.

Disgraced former Labour MP Eric Illsley has been jailed for 12 months for fiddling his parliamentary expenses.

The 55-year-old became the first sitting Member of Parliament convicted of abusing expenses. He pleaded guilty last month to dishonestly claiming more than £14,000 of taxpayers’ money.

He faced massive pressure to stand down as the MP for Barnsley Central after his conviction but did not quit until this week, so entitling him to further taxpayers money

Passing sentence, Mr Justice Saunders noted that Illsley received on average £100 a week more than he was entitled to in expenses over a three-year period. The former MP admitted to probation officers that he did not need the extra money and attributed his actions to greed.

He made the fraudulent claims for council tax, telephone usage, service charges and maintenance, and insurance and repairs at his second home in Kennington, London.

Meanwhile former Labour MP Jim Devine has been found guilty on two counts of making false expenses claims at Southwark Crown Court. The 57-year-old submitted the false invoices for cleaning and printing work, totalling £8,385.

He was found guilty on two charges of false accounting and cleared of one other count relating to £360 for cleaning work.

During the trial Devine claimed his former office manager Marion Kinley paid herself more than £5,000 from his staffing allowance without his knowledge. Commenting afterwards, Ms Kinley said: “Justice has been done. The jury obviously saw through Mr Devine’s lies.”