Taxi Driver Online

HMRC consults on tougher action on black economy




HMRC has announced three consultations on proposals to tackle the hidden economy, which include wider data gathering powers, the requirement for some businesses to register for tax purposes in order to access to licenses or services, and new sanctions for compliance failures

It says its 2013/14 figures suggest losses due to the hidden economy stood at £6.2bn, equating to 18% of the total tax gap.

The first consultation looks at introducing legislation to extend HMRC’s data gathering powers to obtain data from money service businesses (MSBs) on customers who use their services and their aggregate transactions, in order to identify businesses trading without being registered with HMRC.

MSBs are entities which provide money transmission, cheque cashing, or currency exchange services by way of business, and include high street money transmitters and their agents, foreign exchange currency traders, and peer-to-peer money transmitters.

The consultation considers the option of including MSBs as ‘relevant data-holders’ in Part 2 of Schedule 23 to the Finance Act 2011, which would require them to provide bulk data to HMRC. It looks at the issues involved, including the cost and compliance burden on MSBs.

Conditionality

The second parallel consultation on hidden economy measures examines conditionality, which is defined as the principle of making access to licences or services for businesses conditional on them being registered for tax.

This consultation does not propose firm policy measures, but seeks views on the principle of conditionality, the best approach to delivering it, and the services and sectors in which this could be an effective compliance tool. HMRC says the evidence gathered will be used to inform further policy development.

Conditionality would require a method to enable a customer’s tax registration status to be verified in order for them to gain access to relevant licences or services. The consultation suggests one option would be for tax registration to be made a condition of access to licences such as those issued by local authorities for private hire vehicles, trading, scrap metal, environmental health, planning, or property lettings. It could also include licences issued by other government departments or by trade and representative bodies for specific sectors.

An alternative way to introduce conditionality would involve making tax registration a condition of access to businesses services, such as business insurance services, business bank accounts, rental of premises, loans, merchant acquirer accounts or accounts with suppliers or utilities. This could be through voluntary arrangements with the service provider or through regulation. HMRC says one key benefit of this approach would be the potential to reach a large number of businesses, through selecting services which are an important part of doing business.

Penalties

The third consultation explores the potential for new penalties and sanctions to tackle hidden economy participants including those who have already been penalised for deliberate non-compliance, but have not changed their behaviour.

HMRC says its aims is to make sure penalties are applied fairly, so that those who deliberately participate in the hidden economy face tougher sanctions from those largely compliant customers, who may make the occasional mistake.

Options under consideration include amending the existing failure to notify penalty regime so that a second failure to notify attracts a higher penalty rate than a first failure. The consultation looks at several different ways in which an escalating penalty regime could be introduced. It also considers new approaches to penalties for inaccurate returns, and for employers who fail to make PAYE returns.

In addition, the consultation considers potential options for non-financial deterrents for those operating in the hidden economy, including widening the scope of its managing serious defaulters and publishing deliberate defaulters programmes.

HMRC says it is considering additional tracking and potentially enhanced monitoring of taxpayers with a history of hidden economy non-compliance, which could include powers to impose increased penalties in cases where employers or employees have also breached immigration rules so that individuals are working illegally.

Jane Ellison, financial secretary to the Treasury, said: ‘Changes arising from these consultations will help us to support the majority of UK businesses by levelling the playing field between the compliant and non-compliant.

‘This builds on progress that the government has already made to tackle the online hidden economy, and through investment in HMRC to fund more frontline investigators to step up their response to the hidden economy.

‘Our message to those operating in the hidden economy is clear – it is getting harder to hide your activities, come forward before HMRC catches up with you and join the vast majority of businesses that pay their fair share of tax.’

The three consultations close on 21 October.

source: https://www.cchdaily.co.uk/hmrc-consult ... ck-economy

_________________
Think of how stupid the average person is, and realize half of them are stupider than that.
George Carlin

They would do better going after all the serial abusers of the companies act rumoured to be 40 billions annually being evaded there

_________________
lack of modern legislation is the iceberg sinking the titanic of the transport sector

Serial abusers like Amazing, Starbocks, Microsift and the like.

you forgot the big A!!!!

them as well but the ones that open and dissolve at least one company every year and so never file tax returns accounts etc. but are allowed to keep opening new companies

_________________
lack of modern legislation is the iceberg sinking the titanic of the transport sector

They are the same words I said to someone on Monday when I heard this. What about Vodaphone and all the other massive companies who get away without paying billions a year? Always chase the little man they're easier to catch.

The problem is that the multi national companies are adept at playing countries of against each other as in if you don't accept the pittance were offering someone else will.