HMRC’s task forces focus on the North West

HM Revenue & Customs (HMRC) has announced two new task forces that will focus on North West taxpayers who have failed to pay the correct amount of tax. The first will seek to identify suppressed sales and over-claimed expenses by self employed traders in the construction industry. The second will focus on tax evasion by landlords owning or renting three or more properties.

The task forces will be made up of specialists from across HMRC’s enforcement and compliance teams including both civil and criminal investigation specialists and they will consider both direct and indirect taxes. Each task force undertakes an intensive burst of compliance activity concerned with a particular trade or business within a specific region looking at groups of up to 600 taxpayers.

In May and June of this year the first HMRC task forces looked at restaurants in the North West, London and Scotland. To date this has led to 531 investigations, 150 of which are into North West businesses. 22 of these cases are currently being considered for either criminal investigation or HMRC’s Civil Investigation of Fraud Procedure.

A target has been set for HMRC to recover an additional £7 billion each year from its compliance activity and the creation of these task forces is one of the ways in which it aims to meet that target. Over the last few years Revenue officers have been given a range of new powers governing how and when HMRC can visit clients’ premises, gather information and levy penalties. These changes mean that HMRC has been able to move away from the traditional inspection/enquiry regimes in favour of new kinds of intervention such as these task forces.

A business who is subject to any kind of HMRC compliance activity should not underestimate the potential seriousness of the process which can include:

• Criminal prosecution in the most serious cases.
• Penalties of up to 100% of any tax unpaid.
• Recovery of up to 20 years unpaid tax.
• The publication of a person’s identity in certain circumstances.

The impact of any HMRC compliance activity can be significantly mitigated by engaging proactively with the process and ensuring that accurate and timely advice is received. All of PwC’s tax dispute resolution specialists have many years experience helping clients achieve positive outcomes from their dealings with HMRC using their understanding of its structure, practices and compliance processes.

If you think any of your clients are affected by HMRC’s task force activity and would like to discuss how to proceed, please do not hesitate to contact one of PwC’s North West Tax Dispute Resolution team.