Unpaid tax campaign is criticised

30 June 2011 Last updated at 14:45 GMT Plumbers are among a number of groups of traders targeted by the HMRC Some 600 plumbers have come clean on unpaid tax, prompting questions about the success of a campaign in which 50,000 letters were sent out by the tax authority.

HM Revenue and Customs (HMRC) said it was "delighted" with the results, which gathered ?328,756 in unpaid tax.

But one tax expert cast doubt on the success of the campaign, claiming it failed to fully engage with traders.

Investigations into another 500 who did not come forward have now started.

Penalties

HM Revenue and Customs wrote to 50,000 tradespeople in the plumbing industry warning them to pay any tax they owed, or face big fines. This was a general mailshot, not the result of any specific suspicions that recipients were avoiding tax.

However, HMRC believed some registered plumbers and gas fitters in the UK were moonlighting - being paid cash in hand and failing to pay tax.

It told them to admit to any unpaid tax by the end of May in order to avoid larger penalties.

Those who came forward before the deadline were subject to fines of up to 20% of the tax owed. Investigations made after the deadline could result in 100% penalties and prosecution.

"We are delighted with the outcome of the plumbers campaign," said a HMRC spokesman.

"Significant amounts of previously unpaid tax will now be collected. Next week, acting on behalf of all honest taxpayers, we will follow up by opening investigations into 500 cases with thousands more to follow."

But Gary Ashford, of the Chartered Institute of Taxation (CIOT), said that the speedy deadline, and a lack of clear advertising to plumbers, had left some in the trade unaware of the campaign.

"The 600 [admissions] is more than nothing, but it could have been a lot more if HMRC had engaged with this group," he said.

"There should have been an education campaign in place ahead of the disclosure campaign."

According to the government, ?45bn is lost each year through unpaid taxes in the UK. A budget of ?917m has been made available to HMRC to tackle evasion and avoidance.

Previous disclosure campaigns have been targeted at doctors, dentists, and more recently restaurant owners and staff.

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