December 6 2013 Latest news:
Adam Aiken, Editor
Wednesday, February 8, 2012
The latest crackdown on tax cheats by HM Revenue & Customs has been unveiled, with higher-rate taxpayers amongst those being targeted.
On the day the taxman came under fire for the time and money it spent on the investigation into football manager Harry Redknapp, who was cleared by a jury in his tax-evasion case, HMRC said it would be also be looking at further “voluntary-disclosure” campaigns, aimed at people working in the home-improvements sector, and people involved in direct selling, such as with doorstep catalogues.
HMRC’s Marian Wilson said the first move would be to pinpoint high earners who were not completing tax returns.
“Most people pay their taxes in full and on time, so it is right that HMRC works hard to secure payment from those who have not come forward,” she said.
“Using new technology, we have been able to analyse returns to HMRC covering a range of taxes and to cross-reference these with other information to build a picture of where we believe we have taxpayers with missing returns.
“We will use the same technology to analyse information gathered to support the following two campaigns and for each campaign, after the opportunity has closed, we will use the information we have to pursue those who choose not to use the chances we provide to put their affairs in order.”
She added: “We are offering all the people targeted the opportunity to come forward.
“Penalties will be higher if we come and find people after the opportunity. A criminal investigation may also result.
“I therefore urge them to disclose unpaid tax voluntarily.”
Gary Ashford, head of tax investigations at RSM Tenon, said: “This is part of HMRC’s ongoing strategy on tax campaigns.
“HMRC started with offshore bank accounts, then moved to the medical profession and more recently plumbers and tutors and will shortly tackle electricians.
“The home improvements approach is very much a case of sweeping up everyone else who is doing ‘cash in hand’ work at people’s homes.
“The activity on missing tax returns looks like HMRC recognises it has been a little soft in the past on those not submitting returns.
“This is fine, but historically the message has been quite blurred by HMRC advising many people they do not need to submit returns. It is essential that clear guidance on who needs to submit returns is provided.”
HMRC said it had raised more than £500m from its previous voluntary-disclosure schemes, and a further £105m from follow-up activity.
But Michael Muskett, of accountants PKF, said a better tactic would be for the taxman to announce a blanket amnesty before returning to its tactic of focused campaigns.
“Once a wider amnesty was completed, HMRC could undertake research to support investigations and prosecutions that are likely to yield much more substantial sums in terms of tax and penalties,” he said.
“At the moment, the process is reversed: HMRC carries out the research and then sets up an amnesty that allows its targets to pay only low penalties.
“Of course, an initiative like this would require the government to invest more in scaling up HMRC’s investigation teams, but it would surely be worth it in terms of the increased revenue.”