HMRC Toughen Its Stance – Additional HMRC Task Forces & Criminal Prosecutions

HM Revenue & Customs (HMRC) specialist task forces are believed to have collected over £540 million in extra tax revenue in the last financial year. Since their inception in 2011 there have been well over 100 different task forces focusing on a variety of sectors where HMRC believe tax evasion is rife, such as the restaurant trade, the haulage industry, the fishing industry, and the property & construction sectors!

Task force activity was suspended briefly during the COVID-19 pandemic, but with HMRC looking to recover an extra £4 billion in tax over the next 5 years there is no question that task forces will play a major role in recovering additional taxes for The Treasury once the UK emerges from this crisis.

During the COVID-19 pandemic the government has provided a whole range of support to businesses, employees and self-employed individuals, such as the Job Retention Scheme (JRS) and the Self Employed Income Support Scheme. Clearly the cost to the Exchequer has been enormous, and HMRC will no doubt seek to increase tax revenues to cover this. Unfortunately soaring financial pressures, and an unprecedented level of government support, has also created a perfect storm for fraudulent claims and activity. For example, HMRC recently announced they have already received reports of over 800 employers fraudulently claiming money from the JRS.

In view of all of this, HMRC have already stated that there will be an increase in criminal investigations where they believe fraudulent behaviours exist. This means that in addition to recovering taxes, interest and financial penalties, HMRC will look to prosecute those individuals involved.

Whilst this does not affect the vast majority of the UK population, we would certainly recommend reviewing your tax affairs to check for any errors in your tax reporting, or claims. There are still a range of voluntary disclosure options open should you have a disclosure to make to HMRC. Potential prosecution can be avoided, and financial penalties can be minimised if a disclosure is made to HMRC in advance of receiving any letter, or visit from HMRC Inspectors.

By Stuart Petrie, Tax Director and Head of Tax Investigation & Dispute Resolutions at AAB