Her Majesty's Revenue and Customs (HM Revenue and Customs or HMRC) is a non-ministerial department of the UK Government responsible for the collection of taxes, the payment of some forms of state support and the administration of other regulatory regimes including the national minimum wage.... More has announced the launch of new task forces to tackle ‘tax dodgers’ (their words not ours!). This announcement comes a result of the Government’s £900m initiative to tackle tax evasion, avoidance and fraud from 2011/12, which aims to raise an additional £7bn each year by 2014/15.
The task forces will bring together various HMRC compliance and enforcement teams for intensive bursts of activity targeted at specific sectors and locations where there is evidence of tax evasion.
The task forces are part of the department’s broader work to tackle evasion and avoidance, including Managing Deliberate Defaulters and offshore penalties. They will specifically target the highest-risk cases in each high risk trade sector and location, typically focusing on groups of up to around 600 businesses in specific locations.
HMRC is planning a further nine task forces in 2011/12, with more to follow in 2012/13. The restaurant trade in Scotland and the North West will be the next areas targeted.
These announcements follow hot on the heels of the most recent tax amnesty in which HMRC specifically targeted the plumbing industry. The amnesty known as the Plumbers Tax Safe Plan (PTSP)could be used by most taxpayers, see our earlier blog for more details.
Taxpayers have until 31 May to notify HMRC they will be using the tax amnesty to report under declared income. There is potentially a window of opportunity for restaurateurs’ who are for whatever reason concerned by these recent announcements to come forward and get their affairs in order by using the PTSP amnesty opportunity.
In our opinion, the Task Forces indicate a different tack will be taken by HMRC in future. This may be because the targeted tax amnesties aimed at offshore bank accounts, the medical sector and the plumbing industry have not collected as much tax as they had anticipated. Therefore, rather than announcing a new amnesty for the restaurant trade, it seems HMRC have chosen to go for a more direct approach. While it is not known which sectors the task forces will target next, it is likely they will be businesses seen as high risk such as cash traders e.g. market stalls, minicabs, and the construction industry.
If you would like to discuss these recent developments please contact us at the earliest opportunity.