New technology will catch tax evaders, warns HMRC
The tax collector has ramped up its tax evasion technology and is using it to target high-risk groups, after investigating offshore property owners earlier this year.
HMRC’s Property Sales Campaign is aimed at those who have sold second homes in the UK or abroad where Capital Gains Tax (CGT) should be paid. It includes properties that have been rented out and holiday homes.
An HMRC spokesman said: “Previously the problem was the information we had was not connected up, but now we have an IT system that connects all the data.
HMRC’s Connect tool can cross reference one billion HMRC and third party data items and will uncover previously hidden relationships between people, organisations and data.
Over the coming months, HMRC plans to invest £30m more in Connect, train additional risk analysts and build links with third parties.
In particular, it plans to launch 20 taskforces every year between now and 2015, using data to investigate offshore properties, affluent tax evaders and other high risk sectors.
HMRC warned: “If you dispose of a property in Belgravia for a couple of million pounds, we will check that against your tax return. If you are only earning £50,000, we will be asking questions.”
In taxman jargon, sellers who fail to declare the profit are “moonlighters” – unlike the more elusive “ghosts”, they leave a paper trail.
The deadline for notifying HMRC about a second home sale was 9 August. Those who still owe tax must pay up by 6 September or face hefty penalties, the spokesman said. Anyone who had not come forward yet should do so before the second deadline, he urged.
For more details on the campaign, taxpayers can visit HMRC’s website.