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HMRC Cracks Down on Receipt Scam

April 4th, 2019 Comments off

A recent investigation by the BBC has found there’s a booming “rogue trader” business in selling fake receipts. Tens of thousands of pounds’ worth of these false documents are changing hands in construction right now, costing HMRC thousands and risking serious trouble for people using them.

According to HMRC figures, about £1 goes missing for every £17 paid in UK tax each year. Worse still, they believe that over half the people in construction, transport and hospitality are under-reporting their income in their Self Assessment tax returns. Of those, more than half are under-paying by at least £10,000 a year.

When you claim a tax refund or file a Self Assessment tax return, you’re making sure that you’re only paying the tax that you owe. Not only is HMRC continually making random spot-checks on tax returns and refund claims, but they’ve also got both highly trained people and computer algorithms constantly scanning for and flagging suspicious activity.

The HMRC “Connect” system, used by trained analysts, sifts through vast quantities of information, from many disparate systems to find otherwise invisible patterns, network and relationships that suggest fraudulent or unusual activity.

Knowingly and deliberately submitting false information in your self-assessment or tax refund claim counts as tax fraud and is illegal. If HMRC investigate and identify a false submission before you come clean about it, they will judge that your “deliberate action has been concealed” and that means more than just coughing up the extra tax you owe.

As well as the overdue tax itself, you will have to pay 50-100% of the amount owed in additional fines.

Bradley Post, Manager Director at RIFT Tax Refunds says ‘’If you’re working in the construction trade and have fallen for a scam of this type and want to put things right with HMRC before you get into serious trouble, get in touch with them as soon as possible. There will still be a penalty to pay for having made a “deliberate and concealed error” on a tax return but it may be possible to reduce the fine if you or your tax agent tell HMRC about the error, help them work out how much extra tax is due and give them access to information to enable them to check your figures.’’

Providing false documentation to HMRC can result in a jail sentence, under Tax Evasion Laws. Depending on the severity of the case you could receive a summary conviction or via a magistrates court. The maximum UK penalty is a fine for up to £20,000 or a six months prison sentence.

About Rift Tax Refunds

Rift Tax Refunds is one of the UK’s leading tax refunds specialists, helping UK employees in the Construction industry successfully claim back the tax they are owed from HMRC.

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