HMRC increases use of AI and big data

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HMRC is increasingly using big data and AI to gather evidence for its tax investigations, which reduces the need for the organisation to carry out property raids. According to law firm Pinsent Masons, the number of property raids carried out by HMRC has dropped by 30%. In 2016/17, HMRC carried out 669 property raids, as compared to just 471 last… Read more »

84% of perceived tax avoided by hirers

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Figures taken from examples provided by HMRC revealed that when it comes to any perceived shortfall in tax resulting from IR35, the hiring organization is responsible 84% of the time while the contractor is responsible only 16% of the time. This might come as a surprise to anyone who has been listening to what HMRC has said about IR35 and… Read more »

Contractors bullied by clients

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New research by Qdos Contractor has revealed that nearly one in three contractors felt that they had been “bullied” by their clients into accepting a working agreement that benefited the clients. This suggests that the Government’s approach to IR35 may not be working as intended. HMRC’s approach to IR35 compliance was recently in the spotlight due to the BBC’s insistence… Read more »

British contractors warned about offshore schemes

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Over the past year, the sum of money that HMRC has received from requests for information to foreign tax authorities has almost tripled. According to a Freedom of Information Act request by Access Financial, a company of contractor accountants, HMRC received £5.7m from its requests to foreign tax authorities in 2017. In 2016, it received £2m, and in 2013, it… Read more »

Concern over HMRC litigation

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The Chartered Institute of Taxation (CIOT) has raised concerns with Parliament over the apparent eagerness of HMRC to resort to legislation rather than make concessions in cases where the likelihood of success is less than 50%. The result of this behaviour is an increasing number of Tribunal cases. The CIOT suggested that a better course of action would be to… Read more »

VAT bombshell for builders

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The Builders Merchants Federation (BMF) has warned that if its members will need to pay an extra 20% VAT on European construction materials after Brexit, they could face a bill of £1bn. This week, Parliament voted to stop the UK raising taxes bound for the EU if the EU does not agree to collect taxes for the UK. If the… Read more »

BCC looks to delay digital accounts

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A tiny traders’ group has called on the taxman to delay the introduction of digital accounts for small businesses and contractors. The British Chamber of Commerce (BCC) said that the move makes sense because many small businesses are not ready to go digital, as the only thing that they know about the “Make Tax Digital” plan is the name. According… Read more »

Rise in number of serious evasion cases

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The number of serious UK tax evasion cases has risen by 20% amid expectations of further prosecutions. According to tax advisors Pinsent Masons, the Criminal Finance Act 2017 is behind this increase. The act, which requires companies to ensure that their contractors are not facilitating evasion, is just one of many new weapons that HMRC has in its arsenal. Along… Read more »

Hidden Tribunal IR35 case reveals HMRC’s mistakes

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A recent article written by Qdos Contractor has examined the findings of an IR35 determination case heard by the Tribunal. The appellate case originally went before the Tribunal in November 2016, but because the court only gave a verbal decision and no request was made for a written statement, the results have only become known recently. The Tribunal case concerned… Read more »

VAT changes would increase burden on small businesses

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If the VAT threshold lowers, then small businesses may face another administrative burden while they are already adapting to many other changes. Professional tax bodies have expressed concern about a lowering of the £85,000 VAT threshold without the provision of extra help to ensure that small businesses can make a smooth transition to becoming VAT-registered. Alan McLintock, Chair of the… Read more »