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article imageUK: Taxman to target part-time home workers

By Louise Auty     Feb 13, 2012 in Politics
London - In another move which critics will see as targeting the less well off, HM Revenue & Customs (HMRC) has announced new measures aimed at those involved in direct selling.
In a press release issued earlier this week, HMRC warned those involved in direct selling, which covers everything from Ann Summers parties to Avon delivery ladies, that they need to get their taxes in order before the new technology comes on line in the next 12 months.
HMRC will use new technology to search the Internet for information about specified, targeted people and businesses as part of two new campaigns.
They will focus on missing returns, those involved in the home improvement trades and those who use direct selling as a means of generating income. As with previous campaigns, the focus of the new campaigns will be on providing those in the selected groups, who may not be paying the tax they owe, a chance to put their affairs in order on the best possible terms.
Marian Wilson, of HMRC’s Risk and Intelligence, said: "Most people pay their taxes in full and on time, so it is right that HMRC works hard to secure payment from those who have not come forward.
"Using new technology, we have been able to analyse returns to HMRC covering a range of taxes and to cross-reference these with other information to build a picture of where we believe we have taxpayers with missing returns."
The number of people using direct selling to create income through hosting parties at home has risen in recent years with newer companies such as Jamie at Home and Pampered Chef joining the traditional long time favourites like Ann Summers and Avon.
HMRC is also going to be looking at sites like eBay and checking to make sure that those buying and selling as a business using the service are paying the necessary taxes.
Ms Wilson added: "We will use the same technology to analyse information gathered to support the following two campaigns and for each campaign, after the opportunity has closed, we will use the information we have to pursue those who choose not to use the chances we provide to put their affairs in order.
"We are offering all the people targeted the opportunity to come forward. Penalties will be higher if we come and find people after the opportunity. A criminal investigation may also result. I therefore urge them to disclose unpaid tax voluntarily."
More than £500m has been raised by HMRC from voluntary disclosures and a further £105m from follow-up activity. Previous campaigns have targeted offshore investments, medical professionals, plumbers, VAT defaulters and private tutors.
Gary Ashford, from the Chartered Institute of Taxation (CIOT), said the new campaigns showed the Government had no intention of letting up on tax evasion.
"These campaigns may have a feel of déjà vu to many of us – but to those in the Revenue’s sights they are new and serious. They are a real statement of intent from the Government, and show they are determined to reach their target of bringing in an extra £7 billion over the Parliament through initiatives to tackle tax avoidance, evasion and fraud," he said.
Posters on TameBay's blogging website reacted to the news with some cynicism.
Gary posted: "They will get a better return by targeting premiership footballers and bankers and their various tax avoidence scams (sorry I mean schemes). Most of the home improvement folk that will be targeted are foreign and if they get any sense that HMRC are sniffing they will simply leave the country for a while before returning. Direct selling – how many sellers who don’t submit a return make a clear profit in excess of the £7500 personal allowance?
"For many its part time. We full time sellers who moan about the “business privates” are ultimately realists and know that the competition from this area is never going to go away. In the scheme of things on the face of it this is going to net a very small return for the work required and HMRC, whilst making loud noises, will ultimately, as they always do, give up and move on.
"Only if eBay offer their full cooperation and open up their entire sales database to HMRC will HMRC get some sort of result. But are HMRC going to contact eBay and are eBay going to open up their database?"
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