HMRC has recently held consultations on proposals aiming to tackle the black economy.
The measures suggested include expanding HMRC’s data gathering capacity, pressing more businesses to register for tax purposes so they can access business services or licenses, and also new penalties for those who fail comply.
HMRC wishes to extend its bulk data-gathering capabilities and to collect customer data held by financial service companies such as the MSBs (Money Service Businesses). The main purpose is to identify the non-compliant customers who are trading in the shadoweconomy.
HMRC is also considering the implementation of conditionality, which would make the access to certain business services and licences dependent on whether the businessis registered for tax purposes. Such conditionality would make it easier to register for tax, and it would also make it more difficult for the non-compliant businesses to escape their responsibilities.
The taxman is also assessing the potential for newsanctions and penalties for those operating in the black economy which would include those who have already been fined for non-compliance, but haven’t changed their behaviour.
This consultation suggestsoptions for new sanctions and seeks opinions on how those new rulesshould be designed fairly and effectively in order to negate hidden economy activity.
The consultation introduces several ways of how an escalating penalty regime could be implemented and looks at new approaches to penalisesubmissions of inaccurate returns, and also employers who fail to file PAYE returns.
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