The Taskforce: HMRC’s weapon of choice

We have highlighted over the last year the increasing use by HMRC of Taskforces to target particular trades to ensure the they are being compliant and declaring all of their income. This was highlighted again last week when David Hartnett of HMRC stated that "the nation gets diddled" every time services are paid for in cash, as it leads to potential underpayment of Income Tax and VAT.

Taskforces, small groups of Revenue staff dedicated to looking into one sector of the economy, have become HMRC's weapon of choice as they seek to deter tax evasion. They have so far targeted doctors, dentists, restaurateurs, plumbers, private tutors and coaches (e.g. academic tutors, music teachers, dance instructors) and scrap metal dealers as well as traders generally who should be registered for VAT. We understand that in the coming months electricians and e-traders will fall under the spotlight.

The pattern for a Taskforce is to provide a window of opportunity for voluntary disclosure at a reduced penalty rate, followed by using the information they have available to pursue those who have not taken advantage of the amnesty provided. In some cases these have lead to criminal prosecution.

If you are concerned about HMRC's approach, please get in touch with your usual Davies Mayers Barnett contact or Richard Lupson-Darnell.