On the day that Harry Redknapp and Milan Mandaric of Portsmouth Football Club have been cleared of tax evasion, HMRC have announced two new campaigns to catch tax dodgers. HMRC will target tradespeople working in the home improvement market, and people who receive income from buying and selling goods online.
HMRC revealed that they’ll use new technology to search the internet for information about specified, targeted people and businesses. The new campaigns will focus on:
- Missing returns: This will contribute to wider HMRC activity tackling failure to complete tax returns. It will initially focus on those who fail to complete tax returns and who are liable to pay tax at the highest rates.
- Home improvement trades: This will build on campaigns aimed at plumbers and electricians, and will include several 100,000 tradespeople in construction and building work.
- Direct selling: This will target customers who ought to be paying tax on income they earn from buying and selling goods direct to others, or from the commission on these sales. HMRC elaborated to explain that this will cover those who are using e-marketplaces to buy and sell goods as a trade or business and who fail to pay the tax owed. People who only sell a few items and who are not traders are unlikely to be liable to tax and will not be targeted by this campaign.
As with previous campaigns, the focus of the new campaigns will be on providing those in the selected groups, who may not be paying the tax they owe, a chance to put their affairs in order on the best possible terms. However be warned, those who HMRC find as part of follow up work can expect the highest penalty available, so if you need to start paying tax it is in your interest to contact the tax man before they come knocking on your door.