The Treasury currently loses around 15 billion every year as a result of tax evasion. Now though, the days of tax evaders hiding in the shadows are over, according HM Revenue & Customs (HMRC). The HMRC now has more sophisticated technology at its disposal - this includes tools like "web robot" software and a new system called Connect. This all adds up to a revolution in the way HMRC goes about dealing with tax evasion. Some of the people who have been identified as common culprits (people who earn money and don't declare it) include private tutors, personal trainers and people selling goods on sites like eBay.
HMRC will now be able to compare its own information with third-party data, helping tax inspectors to identify relationships that were previously under its radar, as well as enabling them to detect discrepancies between things like bank balance, property income and lifestyle.
The fact that an increasing number of transactions now take place online means people are leaving more traces of their activity than was once the case, which is ultimately making it easier for HMRC to root out tax evaders and circumvent anti-evasion efforts. At the same time, however, it is also likely that more genuine mistakes will be flagged up, and people may be held responsible for their errors.
There are a range of sources of evidence available to HMRC, and experts have warned that their approach needs to be carefully targeted so that people who have made genuine mistakes with their accounting aren't unfairly penalised. Those people will probably need assistance, either from HMRC or from properly-qualified tax advisers or accountants.
It is hoped that technological advances and HMRC's tough rhetoric should act as a deterrent for many potential tax evaders - they want people to realise that there is now a much higher chance of them getting caught, and hope this will persuade them to not bother trying to cheat the system in the first place.
HMRC will now be able to compare its own information with third-party data, helping tax inspectors to identify relationships that were previously under its radar, as well as enabling them to detect discrepancies between things like bank balance, property income and lifestyle.
The fact that an increasing number of transactions now take place online means people are leaving more traces of their activity than was once the case, which is ultimately making it easier for HMRC to root out tax evaders and circumvent anti-evasion efforts. At the same time, however, it is also likely that more genuine mistakes will be flagged up, and people may be held responsible for their errors.
There are a range of sources of evidence available to HMRC, and experts have warned that their approach needs to be carefully targeted so that people who have made genuine mistakes with their accounting aren't unfairly penalised. Those people will probably need assistance, either from HMRC or from properly-qualified tax advisers or accountants.
It is hoped that technological advances and HMRC's tough rhetoric should act as a deterrent for many potential tax evaders - they want people to realise that there is now a much higher chance of them getting caught, and hope this will persuade them to not bother trying to cheat the system in the first place.