Tax fraud is viewed by the tax authorities as any deliberate actions taken by business owners to avoid paying taxes. This includes omission, concealment, and providing misinformation to pay fewer taxes.
Tax fraud takes on several forms such as:
-knowingly submitting faulty tax returns.
-claiming tax repayments or reliefs that the claimant is not eligible for.
-concealing any forms of income or wealth offshore.
-illegally bringing taxable goods into the country.
HMRC has taken intense measures to limit the commitment to tax fraud because in a way the person trying to commit tax fraud is seeking to steal public funds or cheat the system. HMRC ensures having checks on their systems that can easily pinpoint tax fraud. This may include flagging irregular activities, large marginal profits, a director earning less than their employees and so much more. HMRC resided to a tax investigation or audit if it suspects any tax fraud evidence or intentions.
Additionally, HMRC continuously changes legislation to make tax fraud more difficult. An example of that is MTD (Making Tax Digital). HMRC is shifting to a more digital path where errors are easily spotted, numbers are constantly being monitored and tax fraud is a very difficult action to commit.
You may not know this but HMRC works with some businesses from large corporations/industries to help spot tax fraud within the organisation. HMRC’s main goal from this collaboration is to enhance compliance, which will in turn reduce tax fraud.
You may ask yourself, what happens if HMRC finds evidence of tax fraud? Being the official tax body in the UK, HMRC has many authoritative actions at their disposal. They might start by issuing a tax investigation. HMRC has a specialised team to conduct tax investigations. The aim of these investigations is to find more incriminating evidence of tax fraud such as underpaying taxes, unpaid taxes, and concealing important information from the tax body.
In the event of tax fraud, HMRC issues a tax investigation, to collect further evidence. In the event that HMRC finds solid evidence of tax fraud or other criminal actions, HMRC may proceed as follows:
HMRC would seek to form agreements with the individual accused of tax fraud to return the money that was owed either through payment plans or the full amount. The tax authority may wish to add penalties or interest, to the original amount owed, as they see appropriate.
Moreover, in some cases of tax fraud, HMRC may resort to selling the assets of the incriminated individuals or send them to jail under the Crime Act.
All business owners want to pay fewer taxes and many times they fall victim to illegal schemes that claim to help them pay reduced taxes. Only certified accountants and tax advisors can truly help clients minimise their tax liability if there was an opportunity to do so, for example: if you bought new machinery for your business.
Other than that, other areas that claim that can allow you to pay reduced taxes are false claims and might get you persecuted for tax fraud.
Any tac fraud-related illegal activity that you may be weary of can be reported online on HMRC’s website.
Click on this link to report tax fraud: https://www.gov.uk/report-tax-fraud
You can also call HMRC’s Tax Fraud Hotline: 0800 788 887
We recommend visiting HMRC’s website to check this information as it may change over time.
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