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 current name for that unit is the Hidden Economy Team. Previously theses teams have been known as the “black economy units”, and the tax inspectors usually call themselves 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 landlord) but who haven’t told the taxman. Moonlighters are already known to HMRC (e.g. as PAYE employee) but have an undeclared business “on the side” (e.g. eBay traders; employed electricians who work privately in the evenings or at weekends).
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 a phone call, or 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.
How Can Lynam Tax Investigation Specialists Help Me?
Lynam Tax Enquiry Experts 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 get a letter from the HMRC Ghostbusters: Who you gonna call?
Paul Lynam: 0845 643 9997
Andrew Nutbrown: 0771 877 8710