THE CRACKDOWN on private tutors by HM Revenue & Customs has to be welcomed.
Evasion should not be tolerated and it is a pragmatic approach to target professions and industries where first, the opportunities for evasion are greater, and secondly, where information is more available.
The Tax Health Plan has done well, but few would argue that the Plumbers Tax Safe Plan has been a success, with only £328,000 collected through voluntary disclosures.
But there is a trend developing in the taxman’s – wrongly-named, but for want of a better word – amnesties. The first few campaigns, such as the offshore disclosure facility and the THP, were based on hard information that had fallen into HMRC’s hands. As such, HMRC held all the cards and could play any hand they wanted, knowing they had the information to catch evaders.
But the two most recent campaigns – plumbers and tutors – are examples of HMRC pro-actively finding the information for itself. In the case of plumbers, it looked into Gas Safe registered plumbers; for tutors, as revealed by Accountancy Age, it is issuing Section 16 notices. The tutors campaign differs from the plumbers campaign in that it is not even working in conjunction with the professional bodies. By issuing the notices, it is burdening colleges.
So what should be taken from this new aggressive approach? HMRC is being smarter in its campaigns and is showing more confidence. This suggests that there will be new initiatives announced at a more alarming pace as the requirement for easy information is no longer there.
Perhaps more importantly, the carrot is becoming far less important than the stick. Because there seems to be less information readily available, HMRC is perhaps not as expectant that people will be frightened enough to come forward, evidenced by the £328,000 garnered from voluntary disclosures from plumbers. Therefore, the “amnesty period” is short and the publicity is not as persuasive.
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