As part of its ongoing efforts to crack down on tax avoiders, HMRC has announced new campaigns to target private tutors, coaches, tradespeople, and even people who sell things on internet auction sites.
New tax avoidance campaigns
The tax authorities, determined to claw back as much unpaid tax as possible to boost the Treasury’s coffers post-credit crunch, have identified the following groups of traders as the potential future tax avoidance targets:
Trades – following a previous campaign aimed at the plumbing profession, HMRC are to roll out a more extensive campaign aimed at encouraging tradespeople to come forward and pay any undeclared liabilities.
Private Tutors / Coaches – HMRC will also turn its attention to professional people who often offer advice and training as a ‘secondary’ income, covering everyone from dance coaches to national curriculum subject teachers.
E-Marketplaces – Online auction sites have always been on HMRC’s radar. This time, HMRC is going after people who make regular sales on auction sites, although they are not targeting users who sell the odd item on an irregular basis.
VAT rule-breakers – In June, HMRC announced that a new campaign aimed at targeted businesses who turnover more than the VAT threshold, but have not yet registered for VAT.
The ‘web robot’ and other investigative tools
HMRC says that it will use cutting edge investigative tools to root out tax avoiders. This will include ‘web robot’ software, which scans the web and can target potential tax avoiders who may be running a business without having told HMRC that they are liable to pay tax on the income.
The department’s ‘Connect’ computer system contains a wealth of third party and HMRC data, which uses new data in association with records held on previously hidden relationships, uncovering anomalies between such elements as bank interest, property income and lifestyle indicators before homing in on unexplained inconsistencies.
Before designing and launching the campaigns, HMRC intends to seek feedback from any interested parties.
Its Director of Risk and Intelligence, Mike Wells, commented:
“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.
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