HMRC – Tackling the Hidden Economy
There has been much comment on the extent of HMRC’s powers to collect financial data in order to target their resources more effectively where they perceive VAT could be at risk.
As mentioned previously an example of this is where letters from HMRC have been sent to non-VAT registered charities after HMRC has reviewed their final accounts held on the Charity Commission website to question their levels of taxable income.
As a part of HMRC’s national strategy we can report the establishment of an HMRC Hidden Economy unit in South Wales.
A key part of the programme will be seeking organisations who have, for whatever reason, failed to register for VAT when they have exceeded the VAT threshold currently £83,000 of taxable income.
Businesses and charities should not forget that this benchmark of taxable income includes income from zero rate sales areas. It’s not just about the taxable areas subject to the standard or reduced rate that need to be added in.
Experience suggests sectors will be targeted. We’ve seen campaigns around the plumbing industry in recent years as well as charities.
As the unit in South Wales settles into its role, we will report on issues as they arise. Should any in our accountancy network start to see a pattern forming on HMRC visits it would be good to hear.
Contact Andrew Norris