The accountancy firm UHY Hacker Young has obtained figures from HMRC through a freedom of information request that again illustrate how the UK’s tax recovery regime is tightening. The Revenue’s personal tax investigations into self-assessed taxpayers raised a record £845m in unpaid taxes in 2013-14, a rise of 39% on the previous tax year. The figure represents a trebling of the tax yield from these investigations over the last three years.
While the investigations focussed primarily on landlords and online traders, freelancers who have chosen to pursue their professional contracting careers through Revenue-compliant PAYE Umbrella Companies will feel vindicated by this news. The message being consistently sent out by HMRC is that there is no hiding place for those who use dubious tactics to shield their true incomes from the taxman.
UHY Hacker Young’s Mark Giddens told the Financial Times that HMRC had been ramping up its efforts to hunt undisclosed income from rental properties and is now using new enhanced powers to obtain information from third parties.
As more self-assessed taxpayers file their tax returns online, the Revenue is better able to “join up the dots” by cross-checking the information it holds in electronic firm, according to tax expert Dawn Register of the accountancy firm BDO. She explained: “There is no such thing as a random enquiry anymore. Enquiries are much more targeted … [and are] usually acting on specific information that the Revenue holds.”
HMRC has recently been targeting specific professional groups it suspects of under-reporting their incomes. Previous groups to have come under intensified scrutiny include doctors, dentists and plumbers.