Accounts Tax Vat

Accounts, Tax and Vat explained in plain English

Building trade targeted in latest HMRC tax crackdown

constructionThe building trade and those involved in the construction industry such as bricklayers and roofers are next on the list for HMRC to target in their latest crackdown.

Announced on the HMRC website at the beginning of this week the latest campaign to target tax evaders will join the previously announced campaigns against tutors and online e-traders (both of which we will cover in the coming weeks in more detail).

The new crackdown is aimed in particular at those in the construction and building industry who carry out work by selling direct to others.  The trades being targeted include; bricklaying, roofing, window fitting and carpentry and joinery.

HMRC believe that there are sufficient numbers working in these areas that would fall into the higher rate tax bracket and who are not currently completing tax returns.

The aim of such campaigns are to encourage people to admit to avoiding paying tax in return for favourable settlement terms.  Those caught after the voluntary disclosure period will be liable to much larger fines and penalties.

Like with all such campaigns issued by HMRC it is important to get the right advice before making an voluntary disclosures, so as always contact your accountant or find yourself an accountant who can help with the process.

Tax Avoidance vs Tax Evasion

It is important to understand the difference between tax avoidance which is legal vs tax evasion which is a criminal offence.

Tax avoidance is the use of the tax system to one’s advantage and is often associated with elements of tax planning, i.e. by using the rules of the tax system it is possible to reduce the amount of tax payable by planning ahead.

Tax evasion on the other hand is the term used when the true state of affairs are deliberately concealed and misrepresented to the tax authorities, which in the UK is HM Revenue & Customs.

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