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.