Ghostbusters

June 1st, 2008

HMRC have always had special teams tracking down people who haven’t “joined the club” of taxpayers, by telling the taxman that they have a source of income.  The latest name for that unit is the Hidden Economy Team. Previously they have been known as the black economy units and even the ghostbusters, because their job is to hunt down “ghosts” and “moonlighters”. Ghosts are people who run a business or have a source of income (e.g. a buy-to let landlords) but who haven’t told the Revenue.  Moonlighters are usually known to the taxman (e.g. as PAYE employees) but have a business “on the side” (e.g. an eBay trader).
The Hidden Economy Teams were created to find information from multiple sources about tax evasion and people who were not in the tax system. The Hidden Economy Teams comb through publically available information and then search the HMRC databases to check if there are records for that activity.
Usually the first time someone knows they are being investigated by the ghostbuster team is when the brown envelope lands on the doormat with a letter stating that HMRC have information which suggests that the individual may not have declared all of their income and asking them to make contact with the Hidden Economy Team.  It is a mistake to ignore such letters.  The taxman at that stage is looking to recover tax plus interest and penalties.  If the recipient doesn’t co-operate then HMRC may consider criminal prosecution.
The Hidden Economy Teams carry out over 30,000 Tax Investigations and generate about £150 million pounds (tax, interest and penalties) a year from tax evasion.

Lynam Tax partners have a vast amount of practical experience in dealing with the Hidden Economy Team and in managing tax investigations and Tax Disclosures and in many cases we have been able to substantially reduce the amounts of tax, interest and penalty being sought by HMRC.  If you’re subject to a worrying Tax Enquiry or Inspection or you haven’t declared all your income or gains and need to discuss this with a sympathetic, experienced professional, then:

For a free, private, no obligation consultation, call Paul Lynam today on 0845 643 9997