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HMRC ghost arrests ‘just the start’

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16th Aug 2011
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HMRC has announced that five ‘ghost’ plumbers have been arrested and a further 600 are under civil investigation for failing to pay the right amount of tax.

The arrests and investigations follow a campaign targeting plumbers, the Plumbers Tax Safe Plan (PTSP), which invited them to come forward voluntarily and put their tax affairs in order.

John Pointing, assistant director at HMRC Criminal Investigation, said the raids and arrests of ‘ghosts’ - people who have not declared income from the work they do - are the culmination of months of work by HMRC.

“We provided a chance for those we have arrested, and the 600 we are investigating, to come forward voluntarily and put things right” said Pointing. “These arrests send a clear message that HMRC will take action against those who choose not to come forward and pay the tax they owe” he added.

This is the start of co-ordinated action and more raids are expected to take place over the coming weeks across the UK, including Yorkshire, Kent, Cambridgeshire, Tyne & Wear, Midlands and South Wales.

Mike Wells, director at HMRC Risk & Intelligence Service, added: “These arrests are just the start. HMRC is considering hundreds of further cases for criminal investigation in the plumbing and medical professions. Some people may have thought we were bluffing when we said we have information that we will use to prosecute tax evasion.”

Gary Ashford, who represents the CIOT on the Compliance Reform Forum, also noted that the raids are further evidence that HMRC is entering a new phase with these disclosure campaigns. “They have had limited success with the numbers coming forward in the recent medical and plumbers disclosure opportunities, so they are getting tough with those who didn’t register or disclose” he said.

“People should not underestimate the amount of data that HMRC is holding. What we are now seeing is HMRC starting to use that information. The net is tightening on those who break the law” Ashford added.

Under the PTSP scheme plumbers, gas fitters, heating engineers and members of associated trades who owe tax that they had not declared faced a penalty rate of 10%, with a maximum of 20% if they disclosed in full.

While the guarantee of terms within the PTSP are no longer on offer (the deadline was 31 May), HMRC has left the PTSP disclosure route open for those in the plumbing industry who have unpaid tax to disclose but who have still not come forward.

They have until 31 August to arrange for payment.

A campaign targeting VAT cheats was also recently launched and further HMRC campaigns targeting private tutors and e-marketplaces will start during the next year.

Plumbers looking to come forward should telephone 0845 600 4507 or visit the HMRC website.

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Replies (7)

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By docsy.btopenworld
22nd Aug 2011 10:57

Printing

Where did your printer friendly tab go??

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By ThornyIssues
22nd Aug 2011 11:36

Choice of words

An interesting choice of words by HMRC! These cases should be watched very closely as no doubt, in HMRC eyes, "the right amount of tax" includes "deemed" tax and probably relies on their obfuscation of "avoidance" and "evasion".

 

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By [email protected]
22nd Aug 2011 13:44

HMRC PLANS

What other industries/professions have HMRC got plans to investigate next? Is it just those people in the ghost economy or will they apply it to people that have sent in their tax returns?

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By sant1809
22nd Aug 2011 14:39

criminal/civil

I would like to know how they distinguish from the six that have been treated criminally, and the 600 who are being looked at from a civil investigation point of view.

If any of those 600 are issued with an overall demand following the investigation but cannot pay it, do they just declare bankruptcy and end up with a Bankruptcy Restriction Order on the basis that they "failed to keep proper books and records "  ?

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By taxbakbristol
22nd Aug 2011 14:51

Not Just Plumbers!

I am always in favour of HMR&C chasing tax due but as I understand it very little has been recovered from this investigation.

I suggest that the next investigation looks at mobile phone providers who pay a minimal amount of CTax...any ideas with whom to start?

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Replying to neileg:
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By Malcolm Veall
22nd Aug 2011 15:35

I do hope not just plumbers

The more they target these trades where the phrase I hate: "cash in hand" is commonplace the more leverage I have with clients & potential clients when I say that I can make sure their tax affairs are in order.

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By rdrtaxwizard
22nd Aug 2011 17:13

ghost plumbers

Don't forget that these guys are not only evading (not avoiding) income tax and national insurance contributions but also in all probability VAT.

It is people like that who are making the rest of us pay more, leading to more people looking for schemes to avoid taxation.

But it is one thing to legitimately minimise one's tax within the law and quite another to defraud the State.  HMRC may be in some ways a shambles but it is doing the right thing to target industries where evasion is known to be endemic.

 

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