Whether you're a hairdresser in Lincoln or lawyer in Kent, a team of investigators in Whitehall could be combing through your financial affairs in search of unpaid tax. At their disposal are billions of items of data – and vast computer power with which to process it.
The "taskforce" is a special arm of HM Revenue & Customs, established with the aim to collect an extra £50m for the public purse. Its teams undertake "intensive bursts of activity" within specific employment sectors and geographical areas.
Since April, the 27 new taskforces established this year have far exceeded expectations – already raking in £109m to the Treasury.
"The message is clear: if you try to cheat, we are going to catch you"
Jennie Granger, HMRC enforcement chief
Experts say their success is due to HMRC flexing its new powers to access information that employers and websites, such as eBay, hold about their workers or customers.
"There's widespread concern that new powers could be abused, but the latest figure shows that they are clearly working and supports the Revenue's case to control our finances," said Richard Morley, of accountancy firm, BDO.
"If a taskforce has weapons in its arsenal it will use them – and this will prove a strong deterrent to would-be evaders," Mr Morley said.
As a result of the ever-increasing volume of information gathered by its “Connect” computer system, HMRC is now obtaining extensive, detailed data about the financial affairs of UK taxpayers.
The estimated 350-strong team also have the power to turn up, unannounced, to any business to inspect its premises and accounts - without a search warrant.
"We are using state-of-the-art digital tools to help us to identify and target high-risk areas," said Jennie Granger, HMRC's head of enforcement.
• What the taxman knows about you, your finances and your lifestyle
"We have an increasing amount of intelligence and this yield of £109 million – almost double the figure made in the same period last year – shows that our strategy is working.”
The tax grab means HMRC can defend an £800m cash injection awarded in the last Budget to tackle evasion and improve voluntary compliance.
For the first time, we detail exactly how and when this year's 27 teams have targeted different taxpayer groups.
Their method
Construction workers, taxi drivers and self-employed workers making bogus claims on their tax returns – for example for journeys they never made – are among those targeted this year.
But HMRC is also swooping on rural regions of Scotland and Northern Ireland, again trawling data to unearth anomalies which could indicate underpaid tax. Low-earners, for example, living in luxury properties, would set warning lights flashing in Whitehall.
New sources of data, coupled with sophisticated new ways of screening and matching it, means the team can "dig down and look deeper" to catch tax dodgers, warned Lucy Brennan of accountant Saffery Champness.
"HMRC's public shaming of evaders sends the message that the public has more of a moral duty to pay the right amount of tax"
Andrew Hubbard, BDO accountants
And once caught, evaders face the potential additional humiliation of their crime being publicised.
HMRC has "named and shamed" 60 tax evaders just this year. Individuals' names appear on its list of "deliberate tax defaulters" for 12 months, but newspaper reports can remain indefinite. The list is published alongside the taxman's most wanted list, containing faces of the biggest evaders currently at-large.
HMRC revealed how Kevin Brown, a carpet cleaner from Perth, was caught for claiming £250,000 worth in cleaning supplies as "business expenses", for instance. The taskforce investigation spotted that he couldn't possibly have spent so much on carpet cleaner.
"If your income doesn't match that luxury boat you just bought, or you are claiming for expenses that appear improbable, taskforces will be looking into your affairs," said Lucy Brennan. "Investigators can now access a pool of information within a matter of seconds."
The taskforces and their computers are looking at information from your bank and other financial service providers, as well as government sources including the DVLA and the Land Registry.
"These searches used to be done manually and on a local basis when we had local tax offices, but can now be done in a nanosecond from anywhere," Ms Brennan said. The searches can be repeated, also, to capture new data or any changes in circumstance.
• HMRC uses new powers on contractors and freelancers: 'I was told to pay £30,000 within 90 days'
Alongside the hi-tech methods of discovery, taskforces are still using surprisingly rudimentary surveillance techniques.
Anyone suspected to contribute to the "hidden economy" that is worth an estimated £35bn will be a target, no matter how modest.
Officers routinely conduct "street sweeps" to discover if local tradesmen are carrying out jobs without declaring them on their tax returns.
Investigators patrol the streets looking for the display signs typically used by builders, scaffolders and decorators – and then match these with their online tax details.
Lawrence Conway, a chartered surveyor from London, was caught for claiming a retired racehorse, "Thunder Cat", as a business expense, during a sweep of construction workers.
He had reclaimed £135,000 in tax-deductible VAT for Thunder Cat's upkeep. But after investigating, taskforces found out the horse had failed to race since coming ninth in a race at Lingfield Park – 14 years ago.
"The taxman is very concerned about anyone who deals with cash, like builders and taxi drivers," said Ms Brennan. "Offline methods can be the best way to catch these people."
Each "focus" – where taskforces close in on a particular area and industry – lasts around nine months.
Once caught, the investigators will demand the unpaid taxes, with penalties added on top.
HMRC will soon be able to claw money direct from the bank accounts of people who they deem evaders if they continue to refuse to pay taxes due.
The controversial new power will be used as a last resort against non-payers, with banks being required to hand over money held in current accounts or Isas.
Next on the list: landlords and lawyers
HMRC refused to confirm which industries and areas of the country could be next for fear of jeopardising their investigations – but there are ways to predict where the next "intensive burst" will fall.
The taxman routinely launches campaigns to encourage people to get their tax affairs in order.
A recent "Let Property Campaign" encouraged 10,000 buy-to-let investors to confess to £50m in unpaid taxes, after nudging landlords to disclose any unpaid taxes.
Once the amnesty period is over, during which offenders could pay reduced penalties for late tax, the taskforce will step in – and they will be less sympathetic.
To expose buy-to-let landlords, taskforces are expected to use data collected from the Land Registry, council tax databases and online lettings and sales websites such as Rightmove and Zoopla.
BDO's Mr Hubbard said: "If a landlord owns a four-bedroom property, but only declares rent for two tenants, they won't be able to argue that they could not fill the other rooms if the taskforce can prove the property market is popular with tenants."
A campaign targeting buy-to-let landlords recently raked in £50m but experts say the taskforces will swoop in nextA campaign targeting buy-to-let landlords recently raked in £50m but experts say the taskforces will swoop in next Photo: Christopher Furlong/Getty Images
Solicitors were also told to "bring their tax affairs up to date on the best terms possible", in a campaign that ended in July. This is before taskforces become involved and impose more onerous penalties.
Currently, the taskforce can impose penalties of up to 100pc of the unpaid tax – in other words, require double the sum originally due. This applies to those who fail to disclose their tax, particularly if a campaign has run its course. This increases to 200pc if an evader receives income offshore.
HMRC is increasingly unwilling to tolerate people who miscalculate their own tax liability – and fail to come forward when they make a mistake, according to experts.
"As the net closes on tax evaders, HMRC's public shaming of evaders sends the message that the public has more of a moral duty to pay the right amount of tax," said Mr Hubbard.
HMRC's Ms Granger added: "The message is clear: if you try to cheat, we are going to catch you.
"A small number of people still think they can cheat the tax system; these figures prove we can track them down and take back what they owe."
This year's taskforce: the full list
Construction workers
Taxi drivers
Property buyers and sellers
Shops
'Hidden wealth'
Grocery sector
Bogus income tax repayment claims
Money service bureaus
Restaurants
Hot food sellers
Rag trade
Importers
Tobacco
Partnerships
Hauliers
HMRC 'taskforces' raked in an extra £109m this year - here's how - Telegraph
The "taskforce" is a special arm of HM Revenue & Customs, established with the aim to collect an extra £50m for the public purse. Its teams undertake "intensive bursts of activity" within specific employment sectors and geographical areas.
Since April, the 27 new taskforces established this year have far exceeded expectations – already raking in £109m to the Treasury.
"The message is clear: if you try to cheat, we are going to catch you"
Jennie Granger, HMRC enforcement chief
Experts say their success is due to HMRC flexing its new powers to access information that employers and websites, such as eBay, hold about their workers or customers.
"There's widespread concern that new powers could be abused, but the latest figure shows that they are clearly working and supports the Revenue's case to control our finances," said Richard Morley, of accountancy firm, BDO.
"If a taskforce has weapons in its arsenal it will use them – and this will prove a strong deterrent to would-be evaders," Mr Morley said.
As a result of the ever-increasing volume of information gathered by its “Connect” computer system, HMRC is now obtaining extensive, detailed data about the financial affairs of UK taxpayers.
The estimated 350-strong team also have the power to turn up, unannounced, to any business to inspect its premises and accounts - without a search warrant.
"We are using state-of-the-art digital tools to help us to identify and target high-risk areas," said Jennie Granger, HMRC's head of enforcement.
• What the taxman knows about you, your finances and your lifestyle
"We have an increasing amount of intelligence and this yield of £109 million – almost double the figure made in the same period last year – shows that our strategy is working.”
The tax grab means HMRC can defend an £800m cash injection awarded in the last Budget to tackle evasion and improve voluntary compliance.
For the first time, we detail exactly how and when this year's 27 teams have targeted different taxpayer groups.
Their method
Construction workers, taxi drivers and self-employed workers making bogus claims on their tax returns – for example for journeys they never made – are among those targeted this year.
But HMRC is also swooping on rural regions of Scotland and Northern Ireland, again trawling data to unearth anomalies which could indicate underpaid tax. Low-earners, for example, living in luxury properties, would set warning lights flashing in Whitehall.
New sources of data, coupled with sophisticated new ways of screening and matching it, means the team can "dig down and look deeper" to catch tax dodgers, warned Lucy Brennan of accountant Saffery Champness.
"HMRC's public shaming of evaders sends the message that the public has more of a moral duty to pay the right amount of tax"
Andrew Hubbard, BDO accountants
And once caught, evaders face the potential additional humiliation of their crime being publicised.
HMRC has "named and shamed" 60 tax evaders just this year. Individuals' names appear on its list of "deliberate tax defaulters" for 12 months, but newspaper reports can remain indefinite. The list is published alongside the taxman's most wanted list, containing faces of the biggest evaders currently at-large.
HMRC revealed how Kevin Brown, a carpet cleaner from Perth, was caught for claiming £250,000 worth in cleaning supplies as "business expenses", for instance. The taskforce investigation spotted that he couldn't possibly have spent so much on carpet cleaner.
"If your income doesn't match that luxury boat you just bought, or you are claiming for expenses that appear improbable, taskforces will be looking into your affairs," said Lucy Brennan. "Investigators can now access a pool of information within a matter of seconds."
The taskforces and their computers are looking at information from your bank and other financial service providers, as well as government sources including the DVLA and the Land Registry.
"These searches used to be done manually and on a local basis when we had local tax offices, but can now be done in a nanosecond from anywhere," Ms Brennan said. The searches can be repeated, also, to capture new data or any changes in circumstance.
• HMRC uses new powers on contractors and freelancers: 'I was told to pay £30,000 within 90 days'
Alongside the hi-tech methods of discovery, taskforces are still using surprisingly rudimentary surveillance techniques.
Anyone suspected to contribute to the "hidden economy" that is worth an estimated £35bn will be a target, no matter how modest.
Officers routinely conduct "street sweeps" to discover if local tradesmen are carrying out jobs without declaring them on their tax returns.
Investigators patrol the streets looking for the display signs typically used by builders, scaffolders and decorators – and then match these with their online tax details.
Lawrence Conway, a chartered surveyor from London, was caught for claiming a retired racehorse, "Thunder Cat", as a business expense, during a sweep of construction workers.
He had reclaimed £135,000 in tax-deductible VAT for Thunder Cat's upkeep. But after investigating, taskforces found out the horse had failed to race since coming ninth in a race at Lingfield Park – 14 years ago.
"The taxman is very concerned about anyone who deals with cash, like builders and taxi drivers," said Ms Brennan. "Offline methods can be the best way to catch these people."
Each "focus" – where taskforces close in on a particular area and industry – lasts around nine months.
Once caught, the investigators will demand the unpaid taxes, with penalties added on top.
HMRC will soon be able to claw money direct from the bank accounts of people who they deem evaders if they continue to refuse to pay taxes due.
The controversial new power will be used as a last resort against non-payers, with banks being required to hand over money held in current accounts or Isas.
Next on the list: landlords and lawyers
HMRC refused to confirm which industries and areas of the country could be next for fear of jeopardising their investigations – but there are ways to predict where the next "intensive burst" will fall.
The taxman routinely launches campaigns to encourage people to get their tax affairs in order.
A recent "Let Property Campaign" encouraged 10,000 buy-to-let investors to confess to £50m in unpaid taxes, after nudging landlords to disclose any unpaid taxes.
Once the amnesty period is over, during which offenders could pay reduced penalties for late tax, the taskforce will step in – and they will be less sympathetic.
To expose buy-to-let landlords, taskforces are expected to use data collected from the Land Registry, council tax databases and online lettings and sales websites such as Rightmove and Zoopla.
BDO's Mr Hubbard said: "If a landlord owns a four-bedroom property, but only declares rent for two tenants, they won't be able to argue that they could not fill the other rooms if the taskforce can prove the property market is popular with tenants."
A campaign targeting buy-to-let landlords recently raked in £50m but experts say the taskforces will swoop in nextA campaign targeting buy-to-let landlords recently raked in £50m but experts say the taskforces will swoop in next Photo: Christopher Furlong/Getty Images
Solicitors were also told to "bring their tax affairs up to date on the best terms possible", in a campaign that ended in July. This is before taskforces become involved and impose more onerous penalties.
Currently, the taskforce can impose penalties of up to 100pc of the unpaid tax – in other words, require double the sum originally due. This applies to those who fail to disclose their tax, particularly if a campaign has run its course. This increases to 200pc if an evader receives income offshore.
HMRC is increasingly unwilling to tolerate people who miscalculate their own tax liability – and fail to come forward when they make a mistake, according to experts.
"As the net closes on tax evaders, HMRC's public shaming of evaders sends the message that the public has more of a moral duty to pay the right amount of tax," said Mr Hubbard.
HMRC's Ms Granger added: "The message is clear: if you try to cheat, we are going to catch you.
"A small number of people still think they can cheat the tax system; these figures prove we can track them down and take back what they owe."
This year's taskforce: the full list
Construction workers
Taxi drivers
Property buyers and sellers
Shops
'Hidden wealth'
Grocery sector
Bogus income tax repayment claims
Money service bureaus
Restaurants
Hot food sellers
Rag trade
Importers
Tobacco
Partnerships
Hauliers
HMRC 'taskforces' raked in an extra £109m this year - here's how - Telegraph
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