The Consequences Of Tax Evasion In The UK
It is the job of the HM Revenue & Customs office, otherwise known as HMRC, to collect taxes from United Kingdom citizens, and it also will monitor tax payments to ensure compliance. If the HMRC has reason to believe that you may be evading payment of taxes, an investigation will be initiated, and you may face a number of consequences. As a resident of the United Kingdom, it is important to understand this process and the possible penalties.
The Investigation
The HMRC may conduct periodic checks of citizens to ensure compliance with taxation laws, and through these checks, the HMRC may determine that evidence is present indicating tax fraud or evasion. In other cases, a concerned citizen may provide the HMRC a tip that will instigate the investigative process. The investigative process involves the HMRC contacting you directly, and you may choose to comply and participate with the investigation or not. However, the investigation will proceed without your participation. Because of this, it may be in your best interest to work with the HMRC and to provide all documents and supporting evidence requested in a timely manner. Keep in mind that you are permitted to have professional representation during any meetings with the HMRC.
The Process
If your tax payment status is investigated by the HMRC, you may be asked to provide supporting documents or to prepare a disclosure statement to corroborate the amount of taxes that you paid. The HMRC may conduct its own investigation as well, and it may review your tax documents, receipts, bank statements and other financial data. The process may involve several meetings and hearings. Ultimately, the HMRC may determine that evasion did not occur, or you may be required to pay additional taxes. If additional taxes are owed, you may also need to pay interest charges and penalties.
The Consequences
The consequences of tax evasion in the United Kingdom can be damaging in a number of ways. Because those who are caught evading taxes must pay interest charges and penalties on the taxes originally due, there is considerable financial expense associated with this. In addition, many people will choose to pay for professional representation during this process, and there is cost associated with this. The names of those who are caught evading taxes will be published, and there may be an element of public humiliation that a tax evader will be forced to deal with. In addition, some cases of tax evasion may result in criminal charges, and this may cause the guilty party to face additional legal issues. As a final note, those who are caught evading taxes in the United Kingdom often will have their tax returns reviewed more carefully by the HMRC in the future, so there will be added pressure on the individual to ensure that their tax returns are filed truthfully and accurately.
Tax evasion is a serious matter in the United Kingdom, and it can have costly and long-term consequences on your life. The HMRC may be more lenient on those who come forward with their actions or who comply with investigations.
Sally is a content specialist for Francis Clark Tax Consultancy, a business based in South West England who provide tax consultancy services to over 400 firms, visit FCTC.co.uk to find out more.
Categories: Federal Tax, Income Tax, Tax Evasion, Tax Law Tags: tax evasion, taxation, taxes, united kingdom
Federal income tax changes to your January paychecks
Obama administration and US congress have agreed to the 2013 federal income tax rates, but it may affect your January paychecks. The Washington leaders are busy in a talk about 2013 income tax negotiations, but still no final agreement has been reached. UC process the payroll payments to many employees early in January and you will continue with federal income tax rates of 2012 till President Barrack Obama and Congress reach a final agreement and implement new guidelines for 2013 federal income tax brackets.
The new tax rates will be published once IRS offers the official guidelines and organizations will need to upgrade their payroll structure accordingly. Federal income tax rates for 2013 will be published along with IRS publications and new payroll system will not make any adjustments after fully implementation of new tax rates. But it is important to know that January paychecks will reflect the two tax changes;
- The updated 2013 California income tax rates resulting from income passage of Governor Brown and sales tax initiatives for 2013, under proposition 30.
- QASDI social security of employee will be updated from current value of 4.2 percent to new value of 6.2 percent tax rate.
It means 25 percent federal income tax along with 38.3 percent Medicare payroll taxes and 13.3 percent social security are going to federal income tax in 2012. For a middle-class tax filer, the average state income tax is 4.82 percent, which brings 43.12% to state and federal taxes.
Categories: Federal Tax, Income Tax, Tax Law Tags: corporate tax, federal income tax, federal tax, income tax, payroll tax, tax code, tax increase, tax reform
If you need to hire high quality tax staff in the New Year, then you may well benefit from using a specialist recruitment agency
The tax industry
The focus on taxation has increased over 2012, as the government’s tax policy discussions; big business tax evasion schemes; and HMRC’s new task-forces, designed to discover tax evasion and avoidance; all hit the national headlines. As a result of this, taxation is now on many individuals’ and businesses’ minds and good taxation professionals are in high demand for their services.
This is great for the professionals working in the industry, but it can mean that it’s hard for businesses to secure quality staff and talent for their organisation in a highly competitive environment.
Recruitment – the reality
Recruitment isn’t only an expensive process – it’s a time-consuming and complex process requiring good legal knowledge, an understanding of recruitment and selection best practices and the ability to attract and select the right candidate for your organisation into the role you are advertising. These activities can take up a lot of management time and divert that resource away from other core business activities. For this reason, it’s well worth considering a tax recruitment agency to help you find the staff member you need.
Why an agency?
Specialist recruitment agencies really know the industry for which they are recruiting. When it comes to taxation, many of the recruitment consultants will be former taxation professionals themselves. This gives them the edge when it comes to understanding the role on offer and finding the right person to fill it. They will know the language, qualifications and demands of the tax role and have the contacts and network needed to seek out the right candidate.
You can commission a recruiter to find a staff member for you as a one off job, or hire them on a retained partnership basis, if your recruitment needs are large and diverse. This can be a very successful approach for larger businesses who can build up a successful partnership arrangement with a key recruitment agency.
Finding the right agency
The success of the recruitment relationship will be strongly dictated by the account manager who works on the client’s account. This person will be the day to day contact and liaison and will need to have strong rapport and an excellent working relationship with the main client contact. Look for a well-respected and known recruitment agency, ideally with recommendations made to you by people who have previously used their service and seek out signs of business accreditation and quality marques. Check that you have the necessary rapport with the account manager and that they really ‘know their stuff’ rather than overtly selling to you.
Sarah Reed is a careers adviser and relies on the service of pro-tax.co.uk to inform her of any upcoming jobs in the tax industry.
Categories: Federal Tax, Income Tax Tags: