HomeTaxHMRC launches £270m evasion crackdown on cabbies and scrap metal dealers

HMRC launches £270m evasion crackdown on cabbies and scrap metal dealers

HMRC is targeting taxi drivers, minicab drivers and scrap metal merchants with the introduction of new tax evasion checks.

Considered to be high-risk sectors because many of their transactions are done in cash, cab drivers and scrap metal dealers will not be able to renew their licences from local licensing authorities unless they can prove that they have paid their taxes in full. 

If they underpay the tax they owe or make false statements on their tax return then they may face prosecution by HMRC, as well as losing their licence.

The new rules threaten the livelihoods of those in certain trades and represent “a major change in how tax compliance is enforced in the UK”, according to Phil Kinzett-Evans, a Partner at UHY Hacker Young. 

‘Major’ step in how HMRC will enforce tax compliance

He said: “HMRC has collected a whole host of new powers over the last decade but the power to threaten people’s jobs is one of the most fearsome.

“This is a major new step in how HMRC enforces tax compliance. Stopping people being able to work is a step that the tax authority should not take lightly.”

Evasion checks aim to ‘create a level playing

An HMRC spokesman described the new policy as “creating a level playing field for the compliant majority in these sectors, so the majority who play by the rules won’t be disadvantaged by the minority who do not.”

He said: “We know that people who are operating in the hidden economy may not be doing so deliberately – many people do so because they are unaware of or unsure about their tax obligations.”

He described the measures as “an innovative, cost-effective and simple way to tackle this part of the tax gap, preventing people entering the hidden economy.

“The check should take a few minutes every few years and is simply about confirming whether someone is registered for tax or not”, he added.

New rules to prevent £270m of tax evasion

“If the licence applicant is already registered with HMRC if they need to be, this will be a straightforward online check, taking a few minutes, typically once every three years.”

HMRC has calculated that the new rules will prevent £270m of tax evasion over the next five years.

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