HMRC have raised over £500m in unpaid tax and penalties! 1

HMRC Undeclared 8169099509_3860d7f26c

Taskforces are specialist teams that undertake intensive bursts of activity in specific high risk trade sectors and locations in the UK. The teams will visit traders to examine their records and carry out other investigations.

HM Revenue and Customs (HMRC) taskforces have recovered more than £500 million since they were launched five years ago.

The targeted bursts of enforcement activity have brought in progressively higher amounts every year, and the total now stands at more than £540 million. This includes nearly £250 million raised in 2015-16 alone, almost double the previous year’s yield.

Since 2011, HMRC has launched more than 140 taskforces targeting sectors that are at the highest risk of tax fraud including the retail sector, the tobacco industry and the adult entertainment industry.

Jennie Granger, Director-General for Enforcement and Compliance at HMRC, said:

The message is clear: if you try to cheat on your tax, we are going to catch you. A small number of people still think they can cheat the tax system; these figures prove we can track them down and take back what they owe.

We have increasing levels of intelligence, and use state-of-the-art digital tools to help us to identify and target high-risk areas.

Taskforces are just one strand of HMRC’s compliance strategy, which brought in a record £26.6 billion in 2014-15, up 43% from 2011-12.

Nearly 50 new taskforces were launched last financial year, including ones targeted at property, partnerships and hidden wealth. In 2015, a single taskforce focused on Income Tax led to 45 arrests for tax evasion and fraud.

Money brought in through taskforces in previous years:

Year Taskforces yield
2011-12 £24.3 million
2012-13 £47 million
2013-14 £85 million
2014-15 £138.1 million
2015-16 £248 million

Here are 6 tips should you be get an enquiry:

1. Establish Enquiry Type

It is important that the type of enquiry is established. If it is an Aspect Enquiry make sure it is fully dealt with. Remember HMRC needs a reason to extend an enquiry from aspect to full – challenge any extension where necessary.

2. Choose the Best Adviser

Does your accountant have experience of dealing with enquiries and investigations? do you need a specialist to help? do you have tax insurance or FSB membership?

3. Revenue Manuals

These manuals are a good source of information – particularly if the HMRC asks for something and you are wondering whether this should be allowed. We have seen the enquiry manual being quoted successfully to HMRC a number of times.

4. Reduce your risk by filing and paying on time

Events such as late returns or a poor compliance record can increase the likelihood of an investigation.

Once the investigation has started the standard of record keeping becomes important.

5. Own up to your mistakes

I you know of mistakes and errors its much better to declare them at the start of the enquiry.

6. Be Accurate

Or “tell the truth”. Be sensible in what the Inspector is told. Do not be tempted to say the first thing that comes to mind just to satisfy HMRC.

steve@bicknells.net

 

 

HMRC launched six new task forces in May – here are some tips on handling enquiries Reply

The taskforces will target traders who do not pay the right amount of tax in:

 

  • Indoor and outdoor markets in London
  • Taxi firms in Yorkshire and East Midlands
  • Property rentals in East Anglia, London, Yorkshire and the North East
  • Restaurants in the Midlands

 

Taskforces are specialist teams that undertake intensive bursts of activity in specific high risk trade sectors and locations in the UK. The teams will visit traders to examine their records and carry out other investigations.

http://hmrc.presscentre.com/Press-Releases/Six-taskforces-to-tackle-tax-dodgers-launched-67ac1.aspx

HMRC anticipate recovering more than £23m from these new task forces launched on 31st May 2012.

12 taskforces were launched in 2011/12 looking at restaurants (London, North West, Scotland) fast food outlets (London, Scotland), scrap metal dealers (Scotland), fraudulent repayments (London), landlords (North West, Scotland), construction (North West), property transactions (London) and overdue returns (South East).

Here are 10 top enquiry tips from PFP:

1. Establish Enquiry Type

It is important that the type of enquiry is established. If it is an Aspect Enquiry make sure it is fully dealt with. Remember HMRC needs a reason to extend an enquiry from aspect to full – challenge any extension where necessary.

2. Best Adviser

The best person to deal with an enquiry is not necessarily the most technically brilliant. Technical knowledge is vital, but equally important is knowledge of how the system works and the ability to negotiate effectively.

3. Taxpayers Rights

This is a fundamental point. Anyone dealing with the Revenue should be aware of the taxpayer’s rights, e.g. when personal bank statements need to be provided, if meetings are necessary etc.

The client should be informed of their rights and the way the enquiry can be expected to run so that they do not say or do anything rash or unhelpful.

4. Take Out Insurance

At a Chartered Institute of Taxation Conference a presenter said that he had found the Revenue were dealing more efficiently with cases where they knew the clients had cover. This insurance can save money and strengthen a client relationship.

5. Revenue Manuals

These manuals are a good source of information – particularly if the HMRC asks for something and you are wondering whether this should be allowed. We have seen the enquiry manual being quoted successfully to HMRC a number of times.

6. Prevention v Cure

We know that various events such as late returns or a poor compliance record can increase the likelihood of an investigation. A number of accountants are now informing their clients of this fact when chasing up tax return information.

Once the investigation has started the standard of record keeping becomes important. Many accountants are telling clients to improve record keeping where necessary, some are even asking clients to annotate personal bank statements to avoid difficulties with remembering what deposits relate to some 2-3 years later. One accountant said that he knew full well not all of his clients were doing this but as least they had been told.

7. Establish Facts

This is an obvious point. Many of our accountants at the outset of an enquiry will ask the client in a positive and polite way if he/she is aware of any areas with which HMRC may have a problem e.g. undeclared sales. This gives out a clear message – if you tell us now we will do our best to help you; if not then there may be little we can do.

8. Seek Advice

If you don’t know or are unsure, just ask! We can always be asked for a second opinion – sometimes accountants know the answer but telephone just to bounce ideas off of someone. We are here to help, so if you are in doubt, just ask!

9. Be Accurate

Or “tell the truth”. Be sensible in what the Inspector is told. Do not be tempted to say the first thing that comes to mind just to satisfy HMRC.

For example, on one occasion HMRC asked why the accountancy fees were so high compared to previous years. The answer came back “because the records are very complicated and extensive”. HMRC replied he had all the records and they fitted in a shoe-box! In the eyes of the Revenue, the accountant’s credibility had been undermined and as a result, written proof of everything was requested.

10. Negotiate

This speaks for itself and must be remembered at all times. Self Assessment enquiries feature necessary negotiation in many cases. With targets of over 83%, HMRC may not be particularly interested in assessing the right amount of tax – just more tax.

http://www.pfponline.com/top10taxtips/692

steve@bicknells.net