On 19 September 2013 HMRC announced the launch of two new initiatives, a taskforce aimed at the security industry and a campaign focused on residential property lets.
The taskforce will target security guards, bouncers and their employers working in London and the South East and is expected to recover £10 million. The initiative has been prompted by an increase in fraudulent VAT repayment claims although the taskforce will look at all relevant taxes. On 9 September 2013 a Memorandum of Understanding was signed between HMRC and the Security Industry Authority, strengthening the exchange of information between the two organisations.
Other HMRC taskforces have been launched this month to tackle high-risk sectors including the construction industry in London, hidden wealth in the Midlands and the second-hand motor trade, also in the Midlands.
A taskforce is distinct from a campaign in that the former is a specialist team of HMRC investigators targeting specific high-risk trade sectors and the latter an initiative designed to encourage those with previously undeclared income or gains to come forward and make a full disclosure.
The latest campaign to be launched by HMRC is aimed at residential property landlords. According to HMRC figures, there are up to 1.5 million landlords underpaying to the tune of around £500 million in tax every year. The Let Property Campaign is open to all residential property landlords whether they are operating a large portfolio of properties or a single residence, incorporating student or workforce rentals and holiday lettings.
In a change from previous campaigns, there is currently no closing date by which those wishing to take part must notify HMRC, and it is intended that the campaign will run for at least 18 months. For those who fail to come forward during this time, HMRC will use the information they hold in relation to property rental both in the UK and abroad to identify these individuals and use their investigation powers as appropriate. HMRC also now has at its disposal the digital intelligence system Connect, a powerful new tool designed to identify the links between individuals and other entities and properties.
On launching any new campaign, HMRC reiterates the message to those under the spotlight that their failure to come forward may result in higher penalties and in the most serious of cases, possible criminal prosecution.
Finally, HMRC is running a ‘routine review’ on company directors. The review has been launched to ensure that company directors are submitting their personal tax returns, and recipients of the enquiry letter are asked to provide HMRC with details of any full or part-time employments from 6 April 2006 to 5 April 2012 and particulars of self-employment. It also seeks clarification for any company directorships, company registration details and dividends taken as well as any other sources of taxable income.