‘E-traders’ included in new tax crackdown

New campaigns targeting VAT defaulters, private tutors and e-marketplaces will be launched by HM Revenue & Customs (HMRC) over the next year.

HMRC said it would be using tools such as web robot software to search the internet and find targeted information about people and companies.

Using the software, the department can pinpoint more accurately people who have failed to pay the right tax. The web robot, used in conjunction with HMRC’s Connect computer system, also helps find people who are trading without telling HMRC.

Connect alerts HMRC to previously invisible tax evasion by matching HMRC and third party data. It is able to highlight previously hidden relationships, uncovering anomalies between elements including bank interest, property income and lifestyle indicators before homing in on unexplained inconsistencies.

HMRC announced last month that a campaign targeting VAT rule-breakers trading above the £73,000 registration limit. Other campaigns that will be launched in 2011/12 will focus on:

• those who provide private tuition and coaching
• e-marketplaces, including people who use e-marketplaces to buy and sell goods as a trade or business and who fail to pay the tax owed
• trades, which will build on HMRC’s current  plumbers’ campaign.

LINK: Reporting tax evasion