The Chartered Institute of Taxation (CIOT) supports HMRC’s latest initiative to tackle tax dodgers. With HMRC figures indicating that an estimated £8bn of the potential tax gap is down to tax evasion and the hidden economy, it is important to continue to tackle this sector, to remove some of the unfair competition faced by those who pay their taxes.
The CIOT notes that the historic cash trades are receiving close scrutiny from HMRC, who have also been targeting trades people. It is likely that there will be a greater HMRC focus on businesses where cash is prevalent in the coming years.
Gary Ashford, CIOT representative on the Compliance Reform Forum, commented:
“This announcement shows that HMRC are increasing their use of targeted task forces. We have already seen some unannounced visits on restaurants in some parts of the country, including the arrest of some of the restaurant owners themselves and it seems the Midlands is next.
“Anyone who has been evading tax (whether income tax, PAYE or other taxes) in any part of the country should consider coming forward before they are found out. Voluntary disclosure usually leads to lower penalties, a reduced chance of prosecution and a reduced risk of being ‘named’ under the publication of details of deliberate defaulters scheme."
The CIOT notes that HMRC are increasing attention on the property sector. The first taskforces included one looking at transactions in London but now the geographic net is widening.
Gary Ashford added:
“The targeting of property rental income overlaps with other HMRC campaigns, for example the offshore campaign, as many property investors may well be UK residents holding offshore accounts, or non doms, mistakenly not appreciating that UK source income is still taxable. Those affected should take advice from a tax adviser to make the most of the different disclosure facilities available.”
Notes to editors
- HMRC have announced the launch of six new taskforces, which are expected to recover more than £25m from tax evaders – see http://hmrc.presscentre.com/Press-Releases/Six-taskforces-to-tackle-tax-dodgers-launched-67ac1.aspx. The new taskforces cover:
- Indoor and outdoor markets in London;
- Taxi firms in Yorkshire and Nottingham;
- Property rentals in East Anglia, London, Yorkshire and the North East; and
- Restaurants in the Midlands.
Technical Team
31 May 2012
