The UK’s tax authority has quietly ratcheted up tackling tax evasion, launching hundreds of task forces in the past decade to target undeclared earnings in industries such as adult entertainment, construction, dog breeding and double-glazing.
The number of task forces within HM Revenue & Customs has ballooned to 209 since May 2011 when the first team was introduced, it revealed in response to a freedom of information request.
HMRC refused to divulge the full list of what the task forces focus on, saying it would affect the department’s future enforcement ability. It has, however, suspended their activities during the coronavirus crisis, describing it as a “sensible and pragmatic response that is in the best interests of the UK”.
Task forces bring together different HMRC compliance and enforcement teams for intensive bursts of activity focused on both individuals and companies. They target specific sectors and locations where the authority believes there to be a high risk of tax evasion and fraud.
An HMRC spokesperson said: “Our role is to ensure that everyone pays the tax they owe so that we can continue to fund our vital public services. Task forces are just one of the tools at our disposal to target the non-compliant to level the playing field for the honest majority, and have proved effective, with more than £2bn brought in since 2011.”
Several task forces have attracted attention in recent years, including a team launched in 2015 that seeks to crack down on workers in the adult entertainment industry. The task force was set up following a sharp rise in online escort agencies and targets adult club owners and entertainers not declaring their full income. At the time, officials said that those involved in the £5bn industry could earn thousands of pounds a day, and while many paid tax, some did not.
Meanwhile, last year, HMRC announced that a task force targeting dog breeders selling puppies on the black market had raised more than £5m. The task force was set up in 2015 after discussions with animal welfare groups suggested tens of thousands of puppies were being reared in unregulated conditions and sold illicitly every year.
The authorities’ war on tax evasion and avoidance is set to intensify further, particularly as the government seeks new ways to plug the hole in the public finances created by efforts to tackle the coronavirus outbreak.
In the March 11 Budget chancellor Rishi Sunak pledged to boost the number of HMRC compliance staff by around 1,300 and capture more than £4bn in missing revenue over the current parliament. The government also plans to increase its investment in technology to better target those abusing the tax system. The latest crackdown will have tobacco smugglers in its sights as well as those developing evasion and avoidance schemes and people engaged in tax abuses in the construction industry, documents released in the Budget revealed.
However, the government’s campaign against tax avoidance has not been without controversy. Last year, it was forced into a humiliating climbdown on its loan charge policy after an independent review found it “had gone too far” and failed to “get the balance right between tackling tax avoidance and protecting the rights of taxpayers”. The policy originally planned to tax individuals who had used loan-based avoidance schemes for up to 20 years of tax, in a single year.