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Hmrc Tackling The Hidden Economy: Extension Of Data-gathering Powers

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Tackling the hidden economy: Extension of data-gathering powers

https://www.gov.uk/government/consultations/tackling-the-hidden-economy-extension-of-data-gathering-powers

This consultation seeks responses on the best way to implement the extended data-gathering powers to obtain information from electronic payment providers and business intermediaries to minimise any costs to those businesses in complying with these requirements.

http://tamebay.com/2015/07/more-on-hmrc-hidden-digital-economy-plans.html

HMRC crackdown is not just for eBay

There’s been a lot of interest in HMRC’s consultation on tackling the hidden economy and their desire for an extension of data-gathering powers.

It’s worth pointing out that whilst the main reporting in the press has been a focus on eBay and Amazon, in reality that’s not what HMRC are most interested in – they’ve already run several projects to encourage those not declaring all their income from marketplaces to come forward.

What HMRC are interested in

What HMRC are really interested in is the hidden economy in some ways equivalent to the cash economy where people get paid cash in hand and there are no records of the gardener that cuts your grass each week, the assistant at the corner shop that’s paid cash in hand, the mobile hairdresser you always pay in cash or the people that do your ironing in their home for you.

The online equivalent is the person that rents out their room on Airbnb, the Uber taxi driver. They’re also interested in the person who’s created a must-have app that people are downloading (possibly for free) but are then paying for in-app purchases. Often business is taking place on digital platforms where there’s not even a online payment being made (for instance if you advertise products or services on Gumtree for which you’re paid in cash when the service is completed).

The missing £5.9 billion

HMRC reckon there’s a £5.9bn difference between the receipts HMRC actually collects and the amount of tax that should be collected if all taxpayers complied with the letter and spirit of the law. They have three aims:

  • Promote good compliance, making it easier for people to get it right;
  • Prevent non-compliance, preventing mistakes and stopping things from going wrong; and
  • Respond to non-compliance, targeting their approach to tackling complex cases and deliberate cheats.
2 reasons that HMRC want access to data from digital providers Independent checks

Data collected from third parties who facilitate trade can provide information in bulk about the activity of large numbers of traders and be used as an independent check against the data that taxpayers themselves report to HMRC.

Pre-populated tax returns

Secondly it was announced in this year’s budget that HMRC wish to end the annual filling out of paper tax returns by replacing them with online tax returns which can be automatically updated throughout the year. By linking bank accounts, salaries, accounting software, and pension income HMRC’s ambition is to present you with data to check rather than forms and tax returns to complete. Pre-filling or pre-populating information in this way will, they say, help to reduce error and improve overall compliance.

HMRC can only achieve their goal of giving you a pre-populated tax assessment if they’ve access to the data and that’s why they want to increase the scope of their third party data gathering powers.

Will it be effective?

The more HMRC know about you the more effective they’ll be in tackling underpayment of tax. However past experience has shown us that their campaigns often appear to be more of a fishing expedition catching tax payers who have already declared their income...........

Edited by Saving For a Space Ship

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This is partly why authorities around the world are so obsessed with contactless payments and electronic money. They want to track everything we do. Everything.

This is why everyone should be switching to cash only (if they did not already do that). Cash is untraceable and nobody will be able to tell who made the purchase - which is as it should be.

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This is partly why authorities around the world are so obsessed with contactless payments and electronic money. They want to track everything we do. Everything.

This is why everyone should be switching to cash only (if they did not already do that). Cash is untraceable and nobody will be able to tell who made the purchase - which is as it should be.

Pay your taxes like people on PAYE have to.

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Prepopulated, but editable, self assessment forms would actually be a major step forward. And for that reason, I'll be surprised if it happens in any useful way in the next decade.

The record keeping and admin associated with self assessment seriously sucks. But copy and pasting your salary over is nothing compared to keeping track of loads of receipts/calculating % of bills you can claim etc. My guess is that'll tackle the already easy to do stuff first - and possibly even call it a day there.

Edited by StainlessSteelCat

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Pay your taxes like people on PAYE have to.

Who ever suggested anything otherwise?

Also, I was talking generally about paying for things in shops etc. They want us to use contactless cards so that our shopping habits can be used/monitored. Probably targetted marketing etc will follow.

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Who ever suggested anything otherwise?

Also, I was talking generally about paying for things in shops etc. They want us to use contactless cards so that our shopping habits can be used/monitored. Probably targetted marketing etc will follow.

What the goons really want from electronic money is the facility to administer negative nominal interest rates, the opportunity to monitor every aspect of our lives is merely a secondary bonus. Since I vastly prefer freedom to convenience I still use cash to pay for just about everything I buy.

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What the goons really want from electronic money is the facility to administer negative nominal interest rates, the opportunity to monitor every aspect of our lives is merely a secondary bonus. Since I vastly prefer freedom to convenience I still use cash to pay for just about everything I buy.

Yes, this as well. That's why there has been a gradual campaign against cash over the last year or so in the media. They are cranking up the media machine.

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Electronic money would also make it very difficult to keep cash out of the banking system.

However whatever HMRC do it certainly won't make working out how much tax you should be any simpler or easier.

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This all has to do with UK PLC failing as a business, before it goes bankrupt they will extort every last little bit of wealth out the populace. They just turned there sights on BTL but they are going to try and wring every last penny out of every last corner.

It wont work though people will find other ways to trade and the ability of the UK to stay solvent will not last nearly as long as peoples ability to trade in ways other than cash.

The UK isnt a place of joy, social justice and happiness at the moment, a lot of rage here, so they cant just keep pushing those buttons and extorting wealth, history has taught us that.

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What did you think all that Internet spying for?

It's not for catching 'terrorists', as proven by their dismal failure to catch any as a result. Though I guess they could just declare 'selling stuff on ebay and not paying tax' to be 'terrorism'.

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What did you think all that Internet spying for?

It's not for catching 'terrorists', as proven by their dismal failure to catch any as a result. Though I guess they could just declare 'selling stuff on ebay and not paying tax' to be 'terrorism'.

Government makes/backs the terrorists, it needs an enemy to justify its existence. Most terror groups can be originally traced back to a government sponsored group.

Look at who originally funded ISIS.

You are right selling underpants on ebay will be an act of terror if it doesn't fit there agenda or they cant profit from it in some way but selling british built missiles to a "friendly" state is perfectly acceptable and often goes unnoticed.

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