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End Fraud
Email: gtd@endfraud.co.uk

Tax Fraud !

Reporting tax fraud

Tax fraud is a crime and everyone loses out because of it. It means there is less to spend on the Health Service, schools, pensions and many other important services. The government is committed to tackling tax fraud, and much of this work relies on information gathered from members of the public.

What is tax fraud?

Tax fraud is when someone pays too little tax, or wrongly claims a tax repayment by acting dishonestly. Tax fraud is not about negligence; it must be a deliberate act. It includes:

  • individuals not telling HM Revenue & Customs (HMRC) about their income
  • employers paying their staff without operating a PAYE system
  • businesses not declaring some or all of their profits
  • businesses not registering for VAT when they should
  • businesses charging their customers VAT illegitimately
  • traders creating large unpaid VAT liabilities and making fraudulent VAT repayment claims - Missing Trader Intra-Community VAT fraud
  • retailers importing goods such as alcohol and tobacco without paying any Excise Duty
  • individuals smuggling goods such as alcohol and tobacco into the UK

The government can prosecute people who commit tax fraud, as well as anyone who helps them to commit the fraud.

Tax fraud by employers

Some employers pay their employees 'cash in hand' (without deducting tax and National Insurance Contributions from their wages). Although employers can reduce their wages bill by doing this, you can lose out as an employee because you could:

  • not pay enough contributions to get a full State Pension
  • lose your entitlement to certain benefits
  • not get the National Minimum Wage
  • not benefit from your employment rights
  • be prosecuted by HMRC, along with your employer, if you knowingly take part in such a fraud, including deliberately doing nothing to put it right

You can report this type of fraud by calling the Tax Evasion Hotline on 0800 788 887, open Monday to Friday from 8.00 am to 8.00 pm, Saturday and Sunday 8.00 am to 4.00 pm. This is a confidential service and you don't have to give your name.

The 'hidden economy'

Some businesses operate without ever registering with HMRC and so pay no tax. Others register, but only declare and pay tax on some of their income. They're described as being part of the hidden economy. Often, such businesses ask you to pay them in cash.

If you know someone whose business is not registered for tax call the Tax Evasion Hotline on 0800 788 887 (open Monday to Friday from 8.00 am to 8.00 pm, Saturday and Sunday 8.00 am to 4.00 pm) and HMRC will do something about it. You don't need to leave your name and address.

All the information will be looked at seriously to determine the most appropriate action. What HMRC will be able to do might depend on how much information you can give, so it's important to provide as many specific details as possible.

VAT fraud

If a business charges you VAT it must be VAT registered and must declare any VAT it charges to HMRC.

Some businesses deliberately avoid registering for VAT, thereby gaining an unfair advantage over their competitors. Others may either be bogus or may lie about the amount of VAT that they owe.

You might know that a business is not declaring all the VAT they're charging, or you might think that they're not because they:

  • ask you to pay them in cash and are reluctant to provide an invoice
  • request that payment is made to someone other than the business
  • offer a discount for cash and are reluctant to accept cheques or credit cards
  • offer goods for sale at substantially below market value
  • put money into an open till drawer without ringing up a sale

Missing Trader Intra-Community VAT fraud

'Missing trader' fraud involves obtaining a VAT registration number in the UK for the purpose of purchasing goods free of VAT in another EU Member State. These goods are then sold in the UK at a VAT-inclusive price. After which, the trader will go missing or default, without paying the VAT due to HMRC.

Another form of this type of fraud is called 'carousel fraud'.  This involves trading the same goods around contrived supply chains within and beyond the EU.  The goods will re-enter the UK on a number of occasions with the aim of creating large unpaid VAT liabilities and fraudulent VAT repayment claims.

You can report VAT fraud by calling the Customs Confidential hotline, 0800 595 000, open 24 hours, seven days a week.

You don't have to give your name or any personal details.

If a bill shows a separate amount for VAT, it must also show the 9-digit VAT registration number of the business. To check whether a VAT registration number is valid you can phone the HMRC National Advice Service on 0845 010 9000, open Monday to Friday from 8.00 am to 8.00 pm.

Tax fraud on imported goods

As a UK citizen, there are certain rules and regulations about what you can bring into the country and how much, if any, tax you have to pay.

For example, there is no tax (Excise Duty) to pay on any tobacco or alcohol you bring into the UK from Europe, provided it is for your own personal use.

If you suspect a retailer, or any individual, of selling goods they've imported without paying tax, you can report them by phoning the Customs Confidential hotline, 0800 595 000, open 24 hours, seven days a week. 

You don't have to give your name or any personal details.

 

More than half of the 40,000 suspicious tax credit applications detected by HM Revenue and Customs (HMRC) during a six-month period last year are believed to have been made by organised criminal gangs, new government figures have revealed.