HMRC sets ‘new technology’ on builders, electricians and eBay sellers in latest tax crackdown

By
Lee Boyce

Last updated at 6:15 PM on 8th February 2012

Tradespeople: Builders, bricklayers and roofers are to be targeted for tax evasion by HMRC

Tradespeople: Builders, bricklayers and roofers are to be targeted for tax evasion by HMRC

Everyone from Avon ladies to those holding Ann Summers or ‘Jamie at Home’ parties have been warned to get their finances in order ahead of a planned crackdown by the UK tax authority.

HM Revenue Customs (HMRC) has used new technology to identify parts of the economy likely to have a high number of missing tax returns.

The flourishing ‘direct selling’ industry is one of these, as it is possible that many people new to direct selling are unaware they need to fill in a self-assessment tax return to declare their
earnings.

The taxman will target those who receive income from selling goods direct to others, or are paid commission, for example through home-delivered catalogues or ‘party plan’ sales.

The cottage industry of home sales parties has flourished in recent years with Jamie Oliver parties and gatherings of The Pampered Chef particularly popular among stay-at-home mums in the Home Counties.

The boom in these kitchen sales echoes the popularity of Tupperware parties in the Seventies and Eighties.

‘Jamie at Home’ launched in 2009 but the taxman could equally be targeting more established industries such as door-to-door Avon sales.

HMRC’s new campaign will also target tax evaders in a plethora of other industries,
including builders and eBay sellers.

Tax targets: Jamie Oliver parties, where kitchen tools are sold, have seen fast-growing popularity

Tax targets: Jamie Oliver parties, where kitchen tools are sold, have seen fast-growing popularity

The taxman will target tradespeople working in the home improvement market – namely builders, roofers and bricklayers.

HMRC also reaffirmed previously
announced plans to launch campaigns targeted at electricians and those
who trade on e-marketplaces such as eBay, both of which it intends to
launch before the end of next month.

These
are in addition to campaigns targeting tutors and coaches, currently in
progress, and plumbers, medics and offshore bank account holders, which
have been completed.

Avon calling!: Tamzin Outhwaite was the face of Avon

Avon calling!: Tamzin Outhwaite was the face of Avon

The
taxman says it will use new technology to search the internet for
information about specified, targeted people and businesses and the new
campaigns will focus on:

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 such as roofing, window fitting, bricklaying, carpentry and
joinery.

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.

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.

Another two campaigns that will be launched before the end of 2012 will focus on:

So called ‘e-marketplaces’:
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.

Electricians: This
will build on HMRC’s plumbers’ campaign and give an opportunity to
another group of tradespeople to come forward and declare unpaid tax.

Jamie Oliver's hand blender (£54.99) is among the products sold at Jamie at Home parties

Jamie Oliver’s hand blender (£54.99) is among the products sold at Jamie at Home parties

The
HMRC says that as with previous campaigns, the focus 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.

Marian Wilson, of
HMRC’s risk and intelligence unit, said: ‘Using new technology, we have been
able to analyse returns to HMRC covering a range of taxes and to
cross-reference these with other information to build a picture of where
we believe we have taxpayers with missing returns.

‘We
will use the same technology to analyse information gathered to support
the following two campaigns and for each campaign, after the
opportunity has closed, we will use the information we have to pursue
those who choose not to use the chances we provide to put their affairs
in order.

‘We are offering
all the people targeted the opportunity to come forward. Penalties will
be higher if we come and find people after the opportunity. A criminal
investigation may also result. I therefore urge them to disclose unpaid
tax voluntarily.’

eBay crackdown: Sellers who don't declare income to the taxman will be targeted

eBay crackdown: Sellers who don’t declare income to the taxman will be targeted

On a
different, non-trade tack, HMRC will also be targeting those in higher
income tax brackets who should be reporting additional income yet fail
to complete tax returns.

More
than £500million has been raised by HMRC from voluntary disclosures and
a further £105million from follow-up activity. Previous campaigns have
targeted offshore investments, medical professionals, buy-to-let
landlords, plumbers, VAT defaulters and private tutors.

The
Chartered Institute of Taxation (CIOT) said that today’s announcement
shows that there will be no let-up in tackling tax evasion in 2012.

Gary
Ashford, who represents the CIOT on HMRC’s compliance reform forum, and
is national head of tax investigations and dispute resolution at RSM
Tenon, said: ‘These campaigns may have a feel of déjà vu to many of us –
but to those in the Revenue’s sights they are new and serious. 

‘They
are a real statement of intent from the Government, and show they are
determined to reach their target of bringing in an extra £7billion over
the Parliament through initiatives to tackle tax avoidance, evasion and
fraud.

‘Builders should be
clear that if they fail to fix the cracks in their tax records HMRC
could come down on them like a ton of bricks. Window fitters are
potentially in the frame for penalties; party planners and other direct
marketers who have not been including the taxman in their parties risk
getting a very unwelcome invitation from HMRC.’

Here’s what other readers have said. Why not add your thoughts,
or debate this issue live on our message boards.

The comments below have not been moderated.

Yet, if you’re a big multi-national business, you can have your tax bill waived…………….

Par for the course when the tories are in power — same old selective approach to tax paying; putting upon the east targets and ignoring the big players.

You can always trust the Tories to shaft the working class!
Nothing will be done to their rich chummies or pals with their offshore accounts!
Still if you vote Tory than you can expect them to tread all over you!

It’s about time. It just surprises me that the taxman needs to rely on new technology to work out where to concentrate their efforts.
I know plenty of tradesman who pay less tax per year than I spend on a decent meal out at my local Michelin stared restaurant whilst out with my banker chums.

Apparently, the UK financial Services Ombudsman has come to an agreement with Paypal that is mutually financially benefitial. Ombudsman’s income is based on how many complaints it receives from the British Public. The company being complained of has to pay a sum to be investigated. The 20% to 30 % paypal rolling reserve, namely withholding 20 to 30% of users money for 90 days and if you complain, Paypal can close your account, that entitles Paypal to then keep your money for 180 days, break English law, which Paypal contract in the UK is subject to. Ombudsman is fully aware of Paypal’s law breaking activities, (which Paypal had paid out millions in compensation in the USA). If the Ombudsman force Paypal to stop these illegal acts, it will remove the source of complaints from the us, But without complaints, the Ombudsman directors/employees bonus will be in jeopardy, and the empire building will come to a halt. Paypal on the other hand is happy to pay some small peanuts as fines

‘Builders should be clear that if they fail to fix the cracks in their tax records HMRC could come down on them like a ton of bricks. Window fitters are potentially in the frame for penalties; party planners and other direct marketers who have not been including the taxman in their parties risk getting a very unwelcome invitation from HMRC.’ – wow, an accountant with a sense of humour!

Helen, Essex, UK, 8/2/2012 19:25 It shouldn’t be a problem for someone selling things like that. It will be more concentrated on people that regularly sell brand new products.
Ajax, North Yorkshire, 8/2/2012 19:51 Actually, if you’re self employed or the director of a company then you have to declare all income. If you’re just employed normally and earning other income from the type of work this article mentions then it is likely to be over your personal allowance so you should pay tax on it.

Excessive Taxes are crippling any incentive to Work at all.

Ebay is the difference between getting bye or struggling to lots of working people. I use it to generate extra income to pay for such luxuries as petrol , food and bills selling stuff I foolishly worked hard for and NEED to sell now because of the way the economy is.

what a waste of public money tracking small time tax avoiders, they only promote this stuff to justify more funds that go down a deep hole. HMRC has probably got a whiff of some high tech solution to combat pilferers of tax most of which use it to pay ridiculously high bills working from home. The software, infrastructure and support will probably cost 10 times more than they recover after failed court cases. What joke this country is becoming.

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