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Web bots drive search for more evaders

14 June 2011
Issue: 4309 / Categories: News , Admin
HMRC to trawl internet for info on tutors and e-traders

HMRC will use cutting-edge technology to trawl the internet in an effort to discover incriminating data about tax evaders, the department has revealed, as it continues its assault against individuals and firms that cheat the public purse.

Following last month’s launched of a clampdown on businesses that do not register for VAT in spite of exceeding the tax’s threshold, the Revenue has announced that it will target private teachers and e-marketplaces that fail to pay their taxes in full.

As part of its investigation, the department will employ ‘robot’ software to search the web for information about specified people and companies. The taxman will be able to pinpoint more accurately people and firms that have failed to pay the right tax or are trading without having informed HMRC.

The system will be able to expose previously invisible tax evasion by matching a vast amount of Revenue and third-party information, and uncovering anomalies between such elements as bank interest, property income and lifestyle indicators, before homing in on unexplained inconsistencies, the department explained.

Along with evaders who provide private coaching or tutoring and those who buy and sell goods online as a trade or business, an as-yet-unconfirmed trade will be the focus of investigations during 2011/12, in a similar vein to the plumbers’ tax safe plan, which closes on 31 August.

HMRC's director of risk and intelligence, Mike Wells, invited the informed views of people and organisations outside the department ‘to play a fuller part in the campaigns that we design for customers [sic]’.

He added, ‘By being open about our areas of interest for the coming year, we hope to maximise that exchange of information and ensure we reduce the tax gap and help customers [sic] pay what they owe.’

The Chartered Institute of Taxation remarked that the latest development in the Revenue’s fight against tax dodging was to be expected.

‘These targeted campaigns come as no surprise given the government’s high profile target of bringing in an extra £7 billion through initiatives to tackle tax avoidance, evasion and fraud by the end of the parliament,’ said the Gary Ashford of the professional body’s compliance reform forum.

‘It will be important for HMRC to explain to e-traders the borderline between an individual selling one’s own surplus belongings and moving into trading. It is important to understand the “badges of trade”.’

Mr Ashford added, ‘HMRC have a range of sources of evidence available to them, and we assume that they have been doing their homework... Careful targeting is needed as the one fear… is that those who make genuine mistakes over their tax affairs might be caught up in this drive.’

Paul Roberts, head of tax investigations at Grant Thornton, said the taxman 'will not be looking for the occasional sale of private items [via e-marketplaces], but at regular trading activity.’

He added that by announcing in advance three new areas where efforts will be concentrated, the Revenue is stressing ‘that there is no hiding place for undisclosed income and gains, and that [the department] will clamp down very hard on anyone who does not take advantage of this voluntary disclosure’.

Issue: 4309 / Categories: News , Admin
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