HMRC recently made arrests of nearly 5 individuals who are suspected of a global multimillion-pound tax fraud! This was a one-of-a-kind HMRC investigation involving 90 HMRC officers who visited 100 businesses across the United Kingdom and coordinated with international law enforcement agencies in the US, UK and Australia.
The businesses being investigated are suspected of tax avoidance through a very intricate process of using electronic sales suppression (ESS) software in order to evade paying taxes. To HMRC’s surprise, after this incident, it was able to identify thousands of businesses that are using the same system. Among those thousands of businesses are high street businesses, takeaways, and restaurants that use this ESS software.
These identified businesses are given one last opportunity by HMRC to voluntarily disclose and pay the right amount of taxes. HMRC has given them some time to make a voluntary disclosure, however, when the time is up, and they have not reached out to the tax office, they would be facing severe penalties.
Throughout this investigation, it was revealed that the ESS system was designed and sold by a group based in Staffordshire to businesses in the US, UK and Australia. How the system works is very simple, it allows all sales to enter the system, then deletes some sales and reroutes them to an offshore bank account by the business owner.
HMRC has announced one last opportunity for businesses using the ESS tools to come forward to the tax office and be prepared to pay the correct taxes. This case proved how sophisticated HMRC's local and international cooperation is becoming. And additional proof that HMRC is not backing down to identify and prosecute any one involved in tax avoidance.
If you want to learn about how we can assist you during a tax investigation, get in touch.
