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Are you a property-tax dodger?

It’s no joke! Have you heard that property gain or income has recently been identified by HMRC as an area rich in undeclared taxes?

HMRC’s latest tax-avoidance task force, in London, south east England and Yorkshire alone, recovered over £12 million in additional property taxes, and identified around 80 cases to follow up for criminal investigation. Two unfortunate individuals got caught up in it all:

  • A barrister who had evaded £471,512 in unreturned capital gains.
  • A Hertfordshire property consultant who failed to declare capital gains and rental income on a number of properties. For this, not only was he prosecuted but also had to pay the tax and interest due.

Specialist taskforces

A year ago we informed you that HMRC had been awarded £1 billion by government in its fight against tax fraud and tax evasion. Some of the award, initially, was put towards training, staffing and technology; a strategy that would seem to be working, as our blogs on undeclared income may testify.

Can anyone really believe they’re under the radar?

HMRC taskforces comprise compliance and enforcement teams that target specific sectors, in any location in the UK, where evidence points to a high risk of tax evasion and fraud. With extensive powers to do background checks, the teams may contact the taxpayer concerned first, or just pay an unannounced visit to examine records and challenge the validity of their tax affairs. The task forces use intelligence and data gathered from several sources, including the Land Registry and the Valuation Office Agency. HMRC’s objective in tracking down people they suspect of avoidance in this area is to recover the tax due, plus interest and significant financial penalties, and to refer some cases for criminal investigation and possible prosecution.

Voluntary disclosure

HMRC is encouraging voluntary disclosure. We encourage you to voluntarily disclose if you have undeclared Capital Gains Tax or rental income, but before doing so we strongly suggest that you do something else first.

  1. Take out tax investigation insurance immediately if you have not done so already.
  2. Talk to your account manager in confidence.

Expert advice and presentation of the facts are critical to the outcome of any investigation. Our blog on penalties gives you a rough idea of what you could be dealing with in terms of fines and penalties for tax avoidance and tax evasion, but a whole section of our blog is devoted to HMRC’s tactics. Please browse Beware HMRC. Be aware of some of the facts and protect yourself against any investigations by HMRC.

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