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HMRC Cracks Down on Receipt Scam

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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