HMRC launches new task forces to tackle UK tax dodgers

New task forces to tackle tax dodgers have been created by HM Revenue & Customs (HMRC) to undertake intensive burst of activity in specific sectors.

The first task force will focus on the restaurant trade, targeting businesses in London over the coming weeks, followed by the restaurant trade in Scotland and the North West.

The task forces are part of the department's broader work to tackle evasion and avoidance, including Managing Deliberate Defaulters and offshore penalties.

The move is a result of the Government's £900 million spending review investment to tackle tax evasion, avoidance and fraud from 2011/12, which aims to raise an additional £7 billion each year by 2014/15.
‘These task forces are a new approach which uses HMRC's resources to identify and tackle rule breakers and evaders swiftly and effectively. Only those who choose to break the rules, or deliberately evade the tax they should be paying, will be targeted. Honest businesses have absolutely nothing to worry about,’ said Mike Eland, director general for enforcement and compliance.

‘But the message is clear; if you deliberately seek to evade tax HMRC can and will track you down, and you'll face not only a heavy fine, but possibly a criminal prosecution as well,’ he added.
HMRC is planning a further nine task forces in 2011/12, with more to follow in 2012/13.

Task forces bring together various HMRC compliance and enforcement teams for intensive bursts of activity targeted at specific sectors and locations where there is evidence of high risk of tax evasion.

Compliance activity through task forces is targets the highest risk cases in that sector and location, typically focusing on groups of up to around 600 customers in specific locations.

The Chartered Institute of Taxation (CIOT) welcomed the decision. ‘The Chartered Institute of Taxation has long argued that more effort needs to be put into investigating and tackling people who seek to evade tax,’ said Gary Ashford, chairman of the CIOT's management of taxes sub committee.

‘Our members help taxpayers comply with their responsibilities under the tax system and manage their way through its complexities. As well as breaking the law, those who evade tax can gain an unfair business advantage enabling them to undercut and even drive out of business those who pay their taxes in full,’ he explained.

‘HMRC have a range of sources of evidence available to them and we assume that they have been doing their homework so they can target their anti-evasion efforts. Careful targeting is needed as the one fear with this initiative is that those who make genuine mistakes over their tax affairs might be caught up in this drive. Such people need help, either from HMRC or from properly qualified tax advisers,’ he added.

When the Government launched their current tax disclosure facility, the Plumbers Tax Safe Plan, in March, the CIOT highlighted that, alongside it, HMRC were saying that the reduced penalty rate for coming clean on undeclared tax was also on offer to those outside the plumbing trade. The facility is open until the end of May and so this offer could also be used by those in the restaurant trade who are worried about the taxman calling.

‘Those in the restaurant trade with overseas assets may want to look at whether they might also benefit from the other current disclosure facility, the Liechtenstein Disclosure Facility, which, in some circumstances, is the best option available for those making disclosures to HMRC,’ said Ashford.

‘In any case, restauranteurs should take this crackdown seriously and consider if they need to talk to HMRC. With the Revenue targeting a five fold increase in criminal prosecutions for evasion, the consequences of not clearing up tax irregularities could be grave,’ he warned.