HMRC investigations in a changing world
HMRC continues to ramp up its taskforces and disclosure campaigns to tackle tax evasion, but many practitioners are still unsure what brought about the change of approach and how best to interact with the Revenue on behalf of clients.
Jeff Millington, a partner at Smith & Williamson and previously an inspector of taxes with HMRC Specialist Investigations, spoke at the recent AIMS Accountants for Business conference about how to deal with HMRC's ever-changing investigation strategies.
Millington revealed that with 25% staff cuts and £900m in cost savings across the department, its approach was focused on gathering even more information on people and analysing it with HMRC's Connect computer system.
By targeting high risk groups with dedicated teams and disclosure facilities, HMRC believes the strategy is starting to influence behaviour across a number of sectors.
Millington said HMRC uses this psychological approach towards people in specific trades, such as jewellers in the Midlands, to make people think they are being targeted, which encourages them to come forward and disclose.
“Letters are the main approach and usually advise that certain information is already held. They would prefer people to come forward to make disclosures, rather than HMRC chasing them down,” he said.