Do accountants provide HMRC with incorrect data?

A recent survey by Bloomsbury Professional discovered that around 33% of accountants think builders are the most likely group to provide the wrong information on income tax returns.

People working in the construction industry are classed as high risk because they often use cash payments and make inadequate bookkeeping entries.

The second group most likely to struggle when it comes to filing returns with HMRC are taxi drivers. Personal service company contractors came in third place.

4.3% of accountants have no faith in their fellow practitioners’ ability to file accurate returns, putting accountancy on a par with restaurateurs and buy to let investors.

Martin Casimir, who works for Bloomsbury Professional, explained that builders often deal with large amounts of cash, which not only makes bookkeeping challenging, but also creates tax evasion opportunities. It is still commonplace for builders to ask for cash in hand in return for no VAT and since the VAT increase, the incentive is greater than ever.

Last November, the Revenue launched a tax evasion taskforce targeting the construction industry in North Wales and the North West of England.

Dave Hartnett, the permanent secretary for tax at the Revenue, recently said that a cash economy leads to tighter austerity measures. The government needs tax to run schools, hospitals and other public services and every time someone avoids VAT by making a cash in hand payment, they are diddling the nation.

He went on to tell the public to call the whistle-blowing phone line if they believe someone is deliberately accepting cash as a means of avoiding taxes.

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