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Current Issues
HMRC has announced its latest plans to launch 30 new taskforces in the 2012/13 tax year.
The likely targets will include:
- The rag trade
- The motor trade
- Indoor and outdoor markets
Taskforces bring together various HMRC compliance and enforcement teams for intensive bursts of activity targeted at specific sectors and locations where HMRC believes there is evidence of a high risk of tax evasion. HMRC has confirmed that it views the ‘rag trade’ as those concerned with the import, wholesale, marketing and sale of clothing.
In addition to the 2012/13 plans, the Revenue has today also announced the last of its taskforces for the current financial year, which involves the targeting of landlords in Scotland.
HMRC has published the results it expects from the current year taskforces and further details can be found below. HMRC already expects to collect over £50million of additional tax as a result of the 12 taskforces launched in 2011/12, however, this figure is set to rise in the coming months. In addition, 13 criminal investigations are already underway - a clear sign that HMRC will continue to aggressively pursue individuals with the full force of its powers.
HM Revenue & Customs (HMRC) announces the focus of its 2012 campaigns
HMRC has announced the focus of its campaigns to be implemented later this year. The latest targets for HMRC activity are:
- Home improvement trades. This will build on campaigns aimed at plumbers and electricians. Hundreds of thousands of trades people in construction and building work such as roofing, window fitting, bricklaying, carpentry and joinery will be affected.
- Missing returns. This campaign will initially focus on those who fail to complete tax returns and who are liable to pay tax at the highest rates. Overall this will contribute to the wider HMRC activity tackling failure to complete tax returns.
- Direct selling. This will target customers who ought to be paying tax on income they earn from buying and selling goods directly to others, or from the commission on these sales.
Following the success of previous campaigns which utilised HMRC's 'Connect' system to analyse and identify potential links and targets, HMRC has advised that it will use new technology to trawl the internet for information about specific, targeted people and businesses. This will also include cross-referencing returns received with other information held to 'build a picture' of where they can identify taxpayers with missing returns.
As seen in the Plumbers Tax Safe Plan, HMRC will target those that do not come forward with the full force of its powers including higher penalties and criminal prosecution. The Plumbers Tax Safe Plan has so far raised nearly £4million and seen 10 plumbers arrested with HMRC planning more arrests in the future.
HM Revenue & Customs (HMRC) is targeting the restaurant trade
HM Revenue & Customs (HMRC) is targeting the restaurant trade by setting up a specialist task force in London to investigate the tax affairs of restaurant businesses. This is the start of an initiative which will begin in the coming weeks and is set to be rolled out nationally. There are plans for a further nine sector focused task forces in 2011/12, with more to follow in 2012/13. The operations are to be funded out of £900 million set aside in last year's Spending Review. The Exchequor is hoping to raise additional tax revenues of £18 billion by 2014/15.
Mike Eland, HMRC's director general enforcement and compliance, said: "These task forces are a new approach which uses HMRC's resources to identify and tackle rule-breakers and evaders swiftly and effectively. The message is clear - if you deliberately seek to evade tax HMRC can and will track you down, and you'll face not only a heavy fine, but possibly a criminal prosecution as well."
HMRC has announced its latest Task Forces along with details of its forthcoming campaign focusing on landlords.
Latest Task Forces
- Construction industry – London. HMRC expects to raise £3 million from this sector.
- Security guards, bouncers and their employers – London and the South East. HMRC has seen an increased risk of fraudulent VAT repayment claims in this business sector and expects to collect £10 million.
- Second-hand motor traders – Midlands. £3 million is the anticipated yield from this Task Force.
- Hidden wealth/'means' issues – Midlands. HMRC expects to deliver £3 million from comparing people’s lifestyles to known assets, in what is likely to be highly contentious Task Force activity.
Let Property Campaign
The Let Property Campaign is designed to encourage residential property landlords to come forward and voluntarily disclose any undeclared rental income to HM Revenue & Customs.
Although the campaign will be directed at all residential landlords, HMRC is particularly focusing on:
- Landlords who let to students/groups of workers.
- Landlords who let out holiday accommodation.
- Landlords who let out properties for multiple occupancy.
