HM Revenue & Customs has announced that five plumbers, all of whom are Gas Safe registered, have been arrested as part of its ongoing focus on the heating and plumbing sector.
With a further 600 civil investigations in progress, the likelihood of further arrests remains high. HMRC has stated that some of those involved owe as much as £150,000.
HMRC Criminal Investigation assistant director John Pointing, said: “These raids and arrests of ‘ghosts’ - people who have not declared income from the work they do - are the culmination of months of work by HMRC.
“We provided a chance for those we have arrested, and the 600 we are investigating, to come forward voluntarily and put things right.
“These arrests send a clear message that HMRC will take action against those who choose not to come forward and pay the tax they owe.”
The campaign, entitled the Plumbers Tax Safe Plan (PTSP), was launched earlier this year (H&V News 9 Mar, p10), when HMRC announced that it was targeting heating engineers, gas fitters and plumbers to ensure that correct levels of tax were being paid.
Tradespeople were given until the end of May to declare their intention to disclose their earnings, with a further deadline of 31 August to provide details and arrange for tax payments to be made.
Those that complied with the deadlines were offered the incentive of reduced penalty rates of between 10 and 20 per cent.
HMRC Risk & Intelligence Service director Mike Wells said: “These arrests are just the start. HMRC is considering hundreds of further cases for criminal investigation in the plumbing profession.
“Some people may have thought we were bluffing when we said we have information that we will use to prosecute tax evasion.”
The PTSP was described as the first initiative of its type by HMRC, which established a dedicated team to investigate tradespeople suspected of not paying the correct level of tax.
Mr Wells stated last March that the team would use “various intelligence sources” to target those who had not declared their full income.
Penalties for non-disclosure of earnings will vary between 35 and 100 per cent of the tax evaded.
HMRC says that although the guarantee of terms within the PTSP are no longer on offer, it has left the PTSP disclosure route open for those in the plumbing industry who have unpaid tax to disclose.
Those wishing to make declarations can telephone 0845 600 4507 or visit www.hmrc.gov.uk/trades-disclosure.