HM Revenue and Customs (HMRC) has said it will target three further specific groups of trading activity where it perceives that tax is being underpaid.
Private tutors and coaches including both academic and fitness instructors will now come under the taxman’s spotlight as well as e-marketplace traders who have not fully declared income, and any tradesmen who have not been covered by the recent opportunity extended to plumbers to regularise their tax affairs.
The announcement does not give a date or even a timetable for when these campaigns will start, and does not give any specific promise of an amnesty for those who come forward to regularise their affairs.
However, it does stress that those who make voluntary disclosures and settle up with the taxman will get much better terms than those who wait to be found and challenged by HMRC.
It is likely that specific time-limited opportunities will be announced in the coming months to give those with undisclosed income from UK businesses a chance to come forward voluntarily and receive favourable terms in exchange for coming clean on undeclared income and gains.
Paul Roberts, head of tax investigations at accountants Grant Thornton UK, said: ”HMRC has been using its information powers and has invested in cutting edge technology to research several areas of industry and has begun to apply this information to collect undisclosed tax.”
It is understood that HMRC has acquired powerful web trawling tools to identify mismatches between the lifestyle and expenditure of individuals and businesses and what is declared for tax purposes. It is expected to be used in a future campaign which will home in on unexplained inconsistencies between wealth and declared income.
“The recent plumber’s amnesty opened the door to other traders who have undisclosed taxable income,” said Mr Roberts. “It offers traders the chance to regularise their affairs with a mitigated penalty on any undeclared tax, as opposed to the maximum of 100 per cent penalties which HMRC usually seeks.”
The eMarketplace project has long been rumoured, and will catch anyone who has been consistently buying goods and reselling them in an eMarketplace with the intention of profit.
“HMRC has obviously researched this using its information powers and will be looking to recover substantial sums from non registered traders,” said Mr Roberts. “They will not be looking for the occasional sale of private items but at regular trading activity.”
Experts say that announcing three new areas where they will be concentrating their efforts is a warning from HMRC. The taxman is clearly keen to stress that there is no hiding place for undisclosed income and gains and that it will clamp down very hard on anyone who does not take advantage of this voluntary disclosure as failure to do so will run the very serious risk of prosecution.
“If anyone is contemplating coming forward, it is imperative that they take specialist advice on disclosures to see how this applies to them and their business and whether this HMRC announcement is too good to be true,” said Mr Roberts