Pubs, clubs, and beauty firms in HMRC's crosshairs
This month HMRC opened a new front in its battle against tax evasion.
The Revenue launched a series of new taskforces to tackle areas in which it believes underpayment of tax is particularly rife. The new forces are part of the continuing expansion of HMRC’s anti-evasion activities, in which the government has invested a total of more than £900 million.
The four new taskforces will target:
• Pubs and nightclubs in Scotland
• Hair and beauty firms in Northern Ireland
• Restaurants in South Wales and the South West
• The motor trade in South Wales, the South West, Yorkshire, Nottinghamshire, and the North East.
The taskforces will visit traders who they suspect of tax evasion, and will inspect records. They will also undertake other non-specific “intensive bursts of activity”.
Who else is being targetted?
The new taskforces are part of a wider effort by HMRC to crack down on tax dodging within small businesses. They are part of an ever-growing number of forces targeting specific trades and geographical areas.
Amongst the most recent trades to be targeted are: taxi firms in Yorkshire and the East Midlands; property rental firms in London, East Anglia, the Midlands, and the North East; restaurants in the Midlands; and market traders in London. Other high profile campaigns include the Plumbers’ Tax Safe Plan (PTSP), which provided plumbers who had underpaid their tax with an opportunity to settle up. The PTSP closed in August 2011.
What do I need to do?
HMRC has been at pains to highlight that the only firms that need to worry are those that have underpaid their tax. Provided that you have properly declared your tax liabilities, and that your records are in order, you shouldn’t have any difficulties.
HMRC’s efforts do, however, highlight the importance of proper record keeping. As a small business owner it is vital that you keep on top of your record keeping obligations, and that you are aware of and comply with your reporting and taxpaying responsibilities. If you are in any doubt you should speak directly to HMRC, or seek advice from your accountant.