Businesses in the West Midlands in certain sectors face an unprecedented crackdown by HMRC, tax experts at international accountancy firm Mazars in Birmingham are warning.
Restaurants in the Midlands, in particular, face potential investigation in a campaign that HMRC calculates could bring in £25 million in unpaid tax.
Birmingham tax partner Ann Bibby said: “If you are, particularly, a market trader, a taxi firm, a property investor or a restaurant owner, you are operating in market sectors which are specifically being targeted by HMRC.”
HMRC has published details of those sectors it is targeting and they include property rental businesses in Yorkshire, the North East, East Anglia and London, taxi firms in Yorkshire and Nottingham, restaurants in the Midlands and indoor and outdoor markets in London.
Mrs Bibby said: “HMRC’s main focus has been tackling tax evasion by encouraging disclosures of un-declared income, targeted at specific business sectors. Sectors so far targeted under HMRC’s taskforces”have included the Tax Health Plan for Doctors and Dentists in 2010, the Private Tuition Professionals in 2011, and the Plumbers Tax Safe Plan in 2011 for tradespeople.
“HMRC’s message so far has been clear – failure to take opportunity to disclose tax irregularities under the numerous disclosure routes can result in prosecution in the most serious of cases,” she said.
The recent criminal prosecution of a plumber who failed to disclose earnings under the Plumbers Tax Safe Plan supports the message that HMRC fully intent to exercise its powers of prosecution, and is a stark warning to those in future that try to “fly under HMRC’s ever increasing radar”, commented Mrs Bibby.
Mazars commented recently that future “taskforce” targets could include the “rag” trade, motor trade, indoor and outdoor markets, and restaurants. However, HMRC had, until Thursday, May 31, kept the details of these targets firmly under wraps.
Mrs Bibby added: “These taskforces are both trade specific and region specific, and therefore it should be assumed that HMRC has researched thoroughly where there are likely to be cases of non-disclosure.
HMRC has already warned those who owe tax: “This is not an empty threat – HMRC can and will track you down if you choose to break the rules”.
Mrs Bibby said: “There is no escaping HMRC’s campaign into tackling tax evasion in these sectors, and if you think you may be affected please contact one of the Mazars national tax team for a no obligation discussion.
“It is better to be prepared and have a clear understanding of what your likely obligations may be than to bury your head in the sand and hope you somehow slip through the net.”