Unfortunately in this day and age, with technical advancements of Revenue services targeting your industry, the reality of tax evasion and not reporting your income is inevitable discovery and potential jail. Donna Asutaits, an escort, has been jailed for 16 months by Southwark Crown Court for Cheating the Public Revenue” out of £120,000.
One of the commonest questions from M & D’s is whether they can claim clothes against tax.The simple answer is yes if it is like a uniform or a costume. This specifically does not mean separate clothes for working if these clothes can be worn outside work as “every day clothing”. The case of Mallalieu v Drummond (1983) involving the under clothes worn by a Barrister during work is the authoritative decision here which considered every day clothes as serving the non business usage of warmth and decency. Interestingly Lingerie which is used specifically for working would be allowed against tax as it serves neither of these non business usages even though for some it is every day clothing!
HMRC are targeting specific industries for in depth investigation, in particular cash businesses. Starting with Plumbers earlier in the year, the typical line of questioning attempts to secure confessions of under declarations of cash or tips. The point to remember is that confessions in respect of one year will be multiplied by six with penalties and interest added. So you must think hard if under declaration has occurred or you simply want an investigation to end as quickly as possible by admitting to something you have not necessarily done. Are taxi drivers due soon?
The RMT union, representing black-cab drivers in London, is consulting lawyers about possible legal action to recoup any financial losses from the collapse of Manganese Bronze, the cab manufacturer.
The London mayor, Boris Johnson, is being pressed to suspend his scheme to ban any taxi which is more than 15 years old, due to the recent design fault recall and potential difficulties in supply of new cabs.
The government proposals contained in a government consultation document, The Taxation of Controlling Persons, requiring private sector employers to put senior level contractors who engage their personal service companies on their payroll has been much criticised. There are particular difficulties where an Agency is involved in the middle of a contractor and end user where there will inevitably be arguments over who is responsible for defining whether the contractor is a controlling person or not. No doubt the devil will be in the detail of the final legislation.
RTI is a new system being introduced by HMRC to improve the operation of PAYE. Information will be collected more frequently and efficiently. Submissions by employers must be made at or before the time they pay their employees and is a major change from current practice. It is important both the employer and their payroll deliverers are prepared for the changes which start from April 2013.
