Not only is HMRC making random spot-checks on tax returns and tax refund claims all the time, but they’ve also got both highly trained people and computer algorithms constantly scanning for and flagging suspicious activity. The taxman is not your enemy – and you never want to land yourself in his bad books. This is a nail we keep on hammering at RIFT. Of those, more than half are under-paying by at least £10,000 a year. Worse still, they believe that over half the people in construction, transport and hospitality are under-reporting their income in their Self Assessment returns. According to their figures, about £1 goes missing for every £17 paid in UK tax each year. They’re definitely aware of the problem, and they’re taking steps against the fraudsters. To spell it out, knowingly submitting an incorrect tax return is Very Bad Business – and HMRC takes it extremely seriously. Tens of thousands of pounds’ worth of these false documents are changing hands in construction right now, costing HMRC a load of cash and risking serious trouble for people using them. As the BBC’s investigation shows, there’s a booming “rogue trader” business in selling fake receipts. When you file your CIS Self Assessment return, those receipts are used to prove the expenses that should be considered in calculating your tax bill and working out any refunds due.
If you’re self-employed in construction, you need to keep a lot of records of the money you’re spending.
It’s an ugly business, and it’s definitely more trouble than it’s worth. The BBC’s been looking into one of the ways people try to cheat the tax system in the building trade. If you try to get one over on him, you can stand to lose a lot more than just the extra cash you were trying to swindle out of him. He does, however, expect exactly the same respect for you. If you give him the right information when he asks for it, he’ll always play fair with you. What you’re doing is making sure that you’re only paying the tax that you owe – and not one penny more or less. When you claim a refund or file a Self Assessment tax return, there’s no secret “cheat code” you have to type in to make the money come out.
One of the toughest things to explain about tax is that it’s not tricky little game that you can win.
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