Tax Cheats to be Targeted by New HMRC Software

Businesses and individuals avoiding tax payments are to be targeted by new software launched by HM Revenue & Customs (HMRC).

The software, set to be launched later this year, will work by searching the internet to identify small businesses and personal ventures, such as private tutors and eBay traders, who may be operating a business and not declaring their income.

HMRC said that websites including Amazon, Gumtree and eBay would be looked at and that any discrepancies, such as traders not being registered for self-assessment, would help the tax body identify those who have failed to pay the correct amount of tax.

Mike Wells, HMRC’s director of risk and intelligence, said the purpose of the software was to “reduce the tax gap and help customers pay what they owe”.

“We will use the information we gather to pursue people who choose not to use the opportunities we provide for them to put their affairs in order.”

HMRC advised small firms and businesspeople to disclose their status voluntarily and pay any outstanding tax before the web campaign starts this autumn.

Chas Roy-Chowdhury, head of taxation at the Association of Certified Chartered Accountants (ACCA), said small-scale traders who operated sporadically were unlikely to be penalised by HMRC.

“But there are [growing] numbers of businesspeople, such as personal trainers, dance teachers and eBay traders, who are actually doing pretty well, and they should be paying tax and National Insurance like any other businesses.”

“Failing to do so is not only illegal, but unfair on [small and medium-sized businesses] who are compliant with their tax obligations. In a sense, they are gaining an uncompetitive advantage over legitimate small firms and HMRC is right to target them.”

The crackdown is part of a wider effort by HMRC to uncover tax avoidance. Earlier this year, HMRC announced a new campaign to target businesses with a turnover above the VAT threshold of £73,000 who have not registered for VAT.

Tax Cheats to be Targeted by New HMRC Software

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