Contractor accountants will no doubt remember that HMRC established a task force earlier this year to investigate restaurants suspected of tax evasion.

Since the inception of the task force in May, the revenue has started investigations into 531 businesses.

When the task force was first announced, HMRC said it would be targeting high-risk trade sectors and locations around the UK to ensure they were complying with tax regulations.

HMRC is unable to estimate the total tax liabilities under investigation, but the 45 cases that have been processed so far have yielded £634,000, giving an average yield per case of about £14,000.

So far, the task force has been focusing on London, the North West of England and Scotland. 222 investigations have been started north of the border, 159 in the Capital and 150 in the North West. The Revenue is currently considering whether to start Civil Investigation of Fraud procedures or criminal prosecutions in 22 cases.

The Revenue intends to set up a further nine task forces in the financial year ending April 2012 and has said that more will follow.

The government is keen to stamp out tax evasion and in last year’s Spending Review it allocated additional funds to help HMRC tackle the problem. When the task force was launched, the director general of enforcement and compliance at the Revenue explained that it was taking a new approach to dealing with tax evaders quickly and efficiently.

He added that the government is giving out a clear message that tax evaders will be tracked down, and not only fined but possibly facing a criminal prosecution.

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Last week protesters, including several IT contractors, gathered outside the London headquarters of HMRC to demand that Dave Hartnett, the permanent secretary for tax, resign.

A message on the UK Uncut website said the action was taken because of public outrage at the role Hartnett played in letting mega-rich corporations off paying billions they owed in tax. Examples of these let-offs include the settlements agreed with Goldman Sachs and Vodafone, both of which were multi-billion pound disputes.

Police met protesters at the main entrance to HMRC’s HQ and minor scuffles ensued. Protesters demanding the sacking of Hartnett followed Vince Cable, the business secretary, as he walked past the building.

UK Uncut says that Hartnett is a dishonest representative of a crooked system that allows the richest 1% to routinely avoid paying their fair share of taxes.

Hartnett has built up a high profile in the last few years and his reputation as the Whitehall civil servant who is most wined and dined has been linked to secret deals that let wealthy organisations off paying billions in tax.

UK Uncut estimates that £25 billion in Treasury money has been lost to tax evasion and had this money been collected, there would have been no need for the current government austerity measures.

Meanwhile, new research claims that plans to charge banks VAT would not lead to a significant increase in revenue for the government.

The study was conducted by Ben Lockwood, a professor at the University of Warwick, in conjunction with PwC. It found that the only potential increase in revenue would come from charging VAT on consumers because both EU banks and their business customers would be able to reclaim any VAT that was levied on them.

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Contractor accountants who have been salting away their money in a Swiss HSBC bank account will shortly be receiving a letter from HMRC.

The Revenue is writing to individuals offering them the opportunity to disclose their tax liabilities. Accountants can make use of the Liechtenstein Disclosure Facility, but if they choose to ignore HMRC’s correspondence, they could risk further investigation and face penalties of up to 200%. The worst offenders could also be prosecuted.

HMRC received details about the 6,000 accounts from a former HSBC employee. So far investigations have already been launched into more than 500 individuals and businesses holding HSBC bank accounts. After cross referencing with self-assessment tax returns, HMRC identified 6,000 accounts that had not been declared.

Dave Hartnett, the permanent secretary for tax at HMRC, was quick to point out that this was not an amnesty. The Revenue is not offering special penalty rates for people who make a voluntary disclosure, but it is an opportunity for them to correct past mistakes.

Simon Airey, from DLA Piper, feels that HMRC is making an extraordinarily generous offer. The Revenue is under a lot of pressure to collect overdue tax and it does not have the resources to conduct 6,000 complex tax investigations.

McGrigors’ director, Phil Berwick, said this proves that the UK/Swiss deal is one element of HMRC’s bid to put an end to tax evasion. The government is sending out a clear message that the net is closing and HSBC account holders who thought they had a year to sort out their tax affairs may be in for a nasty shock.

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Contractor accountants may get inundated with calls from private tutors and coaches after HMRC announced its latest clampdown on tax evaders.

The Tax Catch up Plan comes hot on the heels of other recent clampdowns on plumbers, medical professions and people who should have registered to pay VAT. The TCP specifically targets individuals who have not declared the income they have received from giving private lessons.

Academic tutors, as well as personal fitness coaches and dance instructors, now have until the end of March next year to declare and pay any unpaid tax for the years leading up to the fifth of April 2010.

HMRC says that anyone who comes forward by the March deadline will be unlikely to receive a penalty of more than 20% of the tax owing. However, after the deadline has passed, the Revenue will investigate the tax affairs of people who have not made a voluntary disclosure and they could face much steeper penalties. The maximum fine for tax evasion is 100% of the tax owed, and the worst case scenario could see offenders also facing criminal prosecution.

In order to take advantage of the TCP disclosure facility, tutors and coaches must register their intent with the Revenue no later than January 6th 2012. They will then have until the 31st of March to tell HMRC how much they owe, and pay it along with any penalties and interest that may be due.

HMRC has issued the following registration phone number – 0845-601-8817, which is open from 08:00 – 19:30, Monday to Friday, for people wishing to register their intent to make a full disclosure under the plan.

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The much talked about Anglo-Swiss tax agreement was signed last Thursday and contractor accountants may be surprised to learn that it does not offer immunity from prosecution to UK residents found guilty of tax evasion.

The agreement states that people coming forth and making a disclosure are highly unlikely to face a criminal investigation. However, the wording of this agreement differs from that of the Liechtenstein Disclosure Facility which guarantees immunity from prosecution.

Gary Ashford, RSM Tenon’s national head of tax investigations, said HMRC has faced a lot of criticism that the deal provides an amnesty for tax evaders. But the wording of the agreement leaves the Revenue with the option to pursue anyone holding a Swiss bank account if they feel that person has committed a serious crime. This will apply to people who make a voluntary disclosure or pay the one-off deduction on their Swiss bank account balance.

He went on to say that HMRC will be allowed to pursue people who have gained their assets from both tax related and non-tax related criminal activities.

Sean Wakeman from Crowe Clark Whitehill explained that the agreement does not lay down a guaranteed penalty for people making a full disclosure. He said people with accounts in Switzerland have three options. They call either make a full disclosure, pay the one-off charge of between 19% and 34% and the withholding tax or transfer their money elsewhere. However, he goes on to point out that not much information has been published on the amount people will pay if they make a full disclosure.

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Accountants for contractors may wish to warn clients with undeclared income in Swiss bank accounts, because further details have now been announced of the historic Anglo-Swiss tax agreement that would see UK citizens penalised for this.

UK taxpayers will face a penalty of between 19% and 34% of the total value of their Swiss bank account to cover past tax liabilities. Account holders can instruct their bank to disclose details of their account and HMRC will then look to recoup unpaid taxes, interest and penalties.

The UK will also have the right to request the bank account details of up to 500 suspected tax evaders each year, regardless of whether the owner of the account has authorised their bank to divulge the information.

The Treasury has also announced that the Swiss government is to hand over an upfront payment of £384 million as a gesture of good faith.

The agreement was approved last Wednesday by Dave Hartnett, the permanent secretary to HMRC, and Michael Ambuehl, the Swiss state secretary. Chancellor George Osborne said the days of hiding tax evasion profits in Switzerland are now over.

However, the charity Christian Aid, said the new deal lets tax evaders off too lightly at the expense of poor countries.

Loretta Minghella, a director at Christian Aid, said it seems extraordinary that the government seems to be letting tax evaders escape with little more than a normal tax bill. They will escape unpunished and their identities don’t even have to be revealed to HMRC. She went on to say that the agreement will have a serious effect on worldwide efforts to stop tax evasion.

The agreement should come into law in 2013 after it has been scrutinised by Parliament and the ratification procedures in Switzerland have been completed.

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HMRC recently announced that five plumbers have been arrested as part of its crackdown on unpaid tax. In addition to the arrests that took place during raids in Hampshire, London, Middlesex, Surrey and West Bromwich, a further 500 investigations are ongoing.

Earlier this year, the Revenue sent letters to 50,000 people working in the plumbing sector warning them they would face large fines if they did not settle their tax liabilities. HMRC thought that some plumbers were moonlighting and receiving cash in hand without declaring tax. Anyone who owned up before the May deadline was fined up to 20% of the tax they owed.

HMRC then raided those who did not come forward initially to make sure they pay their outstanding tax. It is thought that some individuals owe as much as £150,000.

John Pointing from the Revenue said these arrests were the culmination of many months work and warned that more raids will take place in counties across the country including Cambridgeshire, Kent, the Midlands, Tyne & Wear, Yorkshire and South Wales.

Previously the CIoT had said that the Plumbers Safe Tax Plan campaign was not publicised enough and some plumbers were unaware of its existence. However, HMRC has now stepped up the pressure.

Gary Ashford from the Institute said the Revenue as only had limited success with its medical and plumbers’ voluntary disclosure opportunities, so now they are adopting a tougher stance with those who did not come forward. HMRC holds a lot of information and it is now starting to use it.

The government claims that it loses £45 billion every year through undisclosed taxation in the UK and HMRC has now been given £917 billion to tackle tax avoidance and tax evasion.

Plumbers who did come forward and make a disclosure have until the end of this month to pay up in full or make arrangements to pay their outstanding tax liabilities.

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Contractor accountants may want to encourage their clients to register for VAT if they are eligible to pay it and have not already done so.

HMRC recently launched a new campaign to persuade firms that trade above the £73,000 turnover threshold to get their house in order. Businesses that take up the offer will receive softer late payment penalties, whilst those that do not will face substantial penalties and possible criminal prosecution.

The Revenue is to send out at least 40,000 letters to companies telling them how they can register and settle up outstanding liabilities. Firms have until the end of September to make a full disclosure and the majority of them will receive the low penalty rate of 10% on their overdue VAT payment. Furthermore, they will be given the opportunity to disclose other tax arrears in return for a lower than normal penalty.

Once this amnesty had ended, HMRC will begin investigating any firms that have not made a voluntary disclosure. The Revenue has received £500 million already from voluntary disclosures made during three similar campaigns.

HMRC’s Mike Wells, has urged people to come forward and take advantage of the best possible terms. The outstanding VAT, plus any penalties, needs to be paid no later than December 31st.

HMRC has also warned taxpayers that they will not get away with defrauding the tax system. The department’s assistant director of criminal investigation, Martin Brown, said HMRC is cracking down on fraud and has received additional money from the government to help fight tax avoidance and tax evasion.

He made his comments after a “self-styled Lord”, Gregory Roberts, admitted attempting to defraud the Revenue of £3.5 million from falsified documents.

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New research has estimated that 7% of SMEs deliberately evade tax and more than one in three small enterprises would willingly understate profits if they believed they would not get caught.

HMRC is about to launch a new assault on small businesses it believes are evading taxes. The Revenue believes that small enterprises are responsible for the around 50% of the annual tax gap – the difference between what it collects and what it thinks it should collect.

HMRC’s research shows that around 35% of the 4.8 million small businesses in the UK are “attitudinally non-compliant”. These firms are likely to take a casual attitude towards record keeping and believe that tax evasion was acceptable. The study also discovered that out of every five firms that are tempted to break the rules, one would actually do so.

However, small businesses could well be concerned if HMRC inspectors are working on the assumption that a large number of taxpayers want to cheat.

The Revenue on the other hand says its compliance policy aims to encourage taxpayers to get it right. The director-general of business tax, Melanie Dawes, pointed out that 93% of SMEs are not evading tax and the department wants to support honest firms by reducing administrative burdens.

The most common forms of evasion amongst SMEs include failure to record some transactions in the books and not deducting NICs and tax from employees’ pay.

Inspectors are due to start visiting small companies in the second half of this year to check their records. Fines will be levied on firms with significant record-keeping failures.

HMRC is also going to crack down on companies that should be VAT registered, but aren’t. The current threshold for VAT registration is £71,000.

The government earmarked £900 million to help HMRC crack down on tax avoidance and evasion and more than half of this money is being targeted at the small business sector.

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Boris Johnson, the Mayor of London, has said that more than 2,000 people have gained a job or been taken on as an apprentice as a direct result of a jobs and skills drive throughout the GLA.

Between April last year and March this, over 1,100 people joined apprenticeship schemes operated by the Greater London Authority Group and its contractors. Mr Johnson is now well on the way to meeting his own target of creating 3,000 apprenticeships by next year.

The Mayor has also secured jobs for more than 1,000 out of work individuals in the past year by requiring suppliers to the GLA to provide job and training opportunities as a condition of obtaining a contract.

Johnson’s programme uses public sector procurement to combat unemployment and is the first one to do so in the UK. The GLA has been talking to the government and large organisations to encourage more regions to take up this approach.

The London Organising Committee for the Olympics has now adopted the scheme, as have the Olympic Delivery Authority and Crossrail.

Meanwhile, construction firms working on Olympic projects have been warned that HMRC will crack down on any breaches of National Insurance, tax or national minimum wage regulations.

The Director General of enforcement and compliance at the Revenue, Mike Eland, said HMRC wants to help employers and contractors understand their obligations but it will also deal with people who break the law deliberately. The Olympics are a great opportunity for British companies but they must comply with employment and tax obligations.

He went on to reassure honest businesses that they have nothing to be concerned about but said that deliberate tax evaders would be tracked down and liable to criminal prosecution.

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Dave Hartnett, HMRC’s permanent secretary for tax, recently confirmed that the taxman’s approach of targeting specific professions has raked in vast amounts of previously unpaid tax.

He said the Revenue has had great success by targeting people, including the clients of some online accountants, with offshore bank accounts and targeting sectors, like the medical profession, has been very fruitful.

The latest tax amnesty has been aimed at the plumbing sector. HMRC offered lower penalty rates to those willing to declare unpaid tax. The Revenue has also set up task forces to investigate London’s restaurant trade and these will soon be rolled out across the entire UK.

Contractor accountants with clients in the restaurant trade may want to encourage restaurant managers to get up to date with their record keeping. HMRC will expect to see till rolls, cheque stubs and records of sales and takings. The taxman is also likely to take an in-depth look into gratuities received by waiting staff. Tips are often undeclared but as the Revenue toughens its stance on cash payments, waiters could find themselves in the spotlight.

£917 million has been ring fenced to tackle tax avoidance, tax evasion and fraud this year and the Revenue hopes to claw back £7 billion every year within 4 years.

HMRC is also planning to launch an initiative to catch individuals and businesses who have not registered for VAT.

The scheme is due to start in the summer and the Revenue is already having discussions with interested parties. Mike Wells, the director of risk and intelligence at HMRC, said the department wants to gain as much insight as it can into the opinions of people and organisations so it can implement these into the campaigns it designs for its customers.

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Since its launch in 2009, the Liechtenstein Disclosure Facility has yielded HMRC £140 million, the government department’s latest figures have revealed.

Originally, the Revenue expected to yield £1 billion from the LDF by 2015 but the figure has been revised to £3 billion after the encouraging uptake.

By the 31st March this year, 1,351 people had registered their intent to take advantage of the lower penalties offered by the LDF. In March 2010, just 419 registrations had been received.

Phil Berwick from McGrigors pointed out that there has been a consistent increase in the number of registrations but he still believes HMRC will not reach its revised £3 billion total.

He went on to say that uncertainties surrounding a possible deal with the Swiss government is preventing people coming forward. As soon as the deal is announced, more people will have an incentive to register.

The head of tax at law firm Lass Salt Garvin, Frank Strachan, said it will be interesting to note whether more people will sign up by this September. He also remarked that clients are waiting to know the details of the Swiss arrangements before signing up.

Meanwhile, HMRC took another step in the right direction in its battle against tax avoidance after winning a case in the Supreme Court.

The case involved offsetting capital allowances on software purchases against income which left the partnership in question with a minimal tax bill. HMRC claimed the partnership had artificially paid too much for software rights and recycled the money back into the company to repay a bank loan.

Although the Court of Appeal had previously ruled in favour of the partnership, the Supreme Court said it had to consider the real cost of the software.

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