HMRC targets Avon reps and Ann Summers party hosts for unpaid tax

John Fitzsimons
by Lovemoney Staff John Fitzsimons on 17 February 2012  |  Comments 18 comments

The taxman is taking on various groups of direct sellers in a bid to reclaim unpaid tax.

HMRC targets Avon reps and Ann Summers party hosts for unpaid tax

When she was at University, my wife used to be an Avon representative. Every weekend she’d spend a couple of hours trawling around her neighbourhood, keeping the residents supplied with all manner of eyeliner, mascara, nail varnish and the like.

It wasn’t exactly a big earner, but just a few pounds to help cover the costs of her studies. However, it’s sales reps like my wife that the taxman is now targeting, with HM Revenue & Customs (HMRC) suggesting the ‘direct selling’ industry is one area of the economy likely to have a high number of missing tax returns.

It’s not just Avon reps of course. Those who hold Ann Summers or ‘Jamie at Home’ parties will also be under scrutiny – anyone who earns money from selling goods direct to others, or the commission from those sales, will be under the taxman’s watchful gaze.

HMRC isn’t limiting itself to direct sellers either. It’s also launched a campaign cracking down on home improvement traders: roofers, window fitters, bricklayers, carpenters and joiners. This follows similar campaigns aimed at plumbers and electricians.

And finally, HMRC is targeting a third strand – those taxpayers who have failed to complete tax returns and are liable to pay tax at the highest rates.

Getting your tax return in

It’s the people who have not filed their tax returns that HMRC is targeting first.

The deadline for self-assessment tax returns passed at the beginning of the month, so if you still haven’t filed yours, you are in line for at least a £100 fine, irrespective of whether you actually owe any tax or not.

For a guide to what you will have to pay, and the reasons HMRC will accept for late returns, check out What to do if you haven’t filed your tax return yet.

How the taxman is cracking down

HMRC has made sure it's emphasising that it will be utilising technology in its attempts to nab anyone not paying their full tax liabilities.

But what does that actually mean?

Well, mainly it means making use of the internet. The taxman will be searching the web for information about specified, targeted people and businesses. That information will then be cross-referenced with returns sent to HMRC.

If HMRC decides that something is amiss, you can then expect a visit from the taxman.

Admitting your mistakes

If you have made money from direct selling or home improvement trading and haven’t paid the right amount of tax, don’t panic – you can at least limit the damage. In the words of HMRC, if you come forward you will be given the “chance to put [your] affairs in order on the best possible terms”.

That basically means that the penalties you will face for any errors in the past will be a lot smaller if you admit them yourself, rather than waiting for a knock on the door from the inspectors at Revenue & Customs.

Indeed, if you do keep quiet there’s the possibility that you may end up facing a criminal investigation.

Since the campaign aimed at plumbers was launched, nearly 600 people have come forward to notify HMRC of their intention to declare unpaid tax worth more than £4 million. Ten plumbers have been arrested, with more than 1,000 civil cases prepared.

If you want to come forward and voluntarily disclose, call 0845 601 5041.

More campaigns to come

The taxman isn’t finished though. There are two more campaigns to be launched before the end of the tax year.

The first will be targeting e-marketplaces – those who use sites like eBay to buy and sell goods as a trade or business, but don’t pay the tax owed. HMRC made sure to point out that those who only sell a few items here and there and are not traders are unlikely to be targeted.

The second campaign will be focused on electricians. The success of the plumbers campaign has convinced HMRC to focus on a specific group of tradespeople again.

A targeted approach

HMRC has enjoyed some success with this targeted approach thus far, picking out specific areas of the economy where tax revenues are believed to be slipping through their fingers.

Inevitably though, there will be some criticism that the sums recovered are relatively small. The £4 million from plumbers, for example, is small change in the grand scheme of things, particularly when HMRC is accused of a ‘cosy’ relationship with big businesses, such as the deal with Vodafone which saw the mobile network’s tax bill of around £7 billion waived.

What do you think? Is HMRC right to conduct these small, targeted campaigns at individuals? Let us know your views via the comment box below!

More: How to pay less tax | How to call 0845 and 0870 numbers for free

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Comments (18)

  • caz769
    Love rating 2
    caz769 said

    I used to be an Avon rep when the children were small, over 17 years ago, should I still tell the taxman. Never made a lot of money from it and certainly nowhere near the tax threshold.

    Report on 17 February 2012  |  Love thisLove  0 loves
  • Gus1
    Love rating 0
    Gus1 said

    Hi, Don't worry about this. If you were under the tax threshold and it was 17 years ago it is not necessary to inform HMRC. It will cost them money to deal with this information and they will not gain any Revenue from it. Gus

    Report on 17 February 2012  |  Love thisLove  0 loves
  • Mike10613
    Love rating 626
    Mike10613 said

    With computers, the HMRC can become very efficient and use their spare manpower to chase tax evasion; it's long overdue. I hope they won't forget to chase those people who constantly travel the world, live in mansions and pay little tax. I know it's a Diamond Jubilee year but every family must contribute to getting the country back on its feet. Austerity for all, everyone needs to get on board; not just those on minimum wage.

    Report on 17 February 2012  |  Love thisLove  1 love
  • Hardtruth
    Love rating 69
    Hardtruth said

    Sums up everything that is wrong with the unfit for purpose HMRC. Toxic combination of large power and limited intellect. Whilst they go after the little people earning 10-15k per annum from such parties or running small shops on eBay they do grubby deals with major corporations leaving 100s millions if not billions (when you tot it all up) in tax on the table.

    Don't get me wrong I am a capitalist subscriber but this sector has disgraced itself over the past few years abetted by the twonks at HMRC who show themselves up as nothing more than flat track bullies.

    Report on 17 February 2012  |  Love thisLove  4 loves
  • celticlass
    Love rating 9
    celticlass said

    the cosy up to big business is obscene. They should morally pay their fair share and the law should be changed so that they do pay their fair share, billions sit in off shore accounts avoiding tax - how many schools, hospitals etc could use the tax these evaders deprive the country of??. Avon reps are usually mums at home who flog a few bits to help out with feeding and clothing their kids. Unless you are at the top of this pyramid the income is peanuts!! Its easier to pick on the little man--- no big gun lawyers to fight their corner!!!

    Report on 17 February 2012  |  Love thisLove  3 loves
  • ferdyg
    Love rating 13
    ferdyg said

    Very strange that previous two comments suggest that it is OK for small businesses to avoid tax. After all, you can earn £7475 without incurring tax and after that it is 20%, hardly draconian. So yes, HMRC should go after tax cheats both big and small.

    Report on 17 February 2012  |  Love thisLove  1 love
  • yocoxy
    Love rating 152
    yocoxy said

    Mums at home earning peanuts will have no tax to pay, so no need for paranoia..

    I'd like HMRC to go after the car boot professionals. When I visit these places, it is so obvious to me which of the traders are pros. No doubt they're at a different sale every day and are effectively retailers who should be paying tax on their income. I wonder how many of them are also claiming benefits.. But maybe that's my paranoia..

    I pay tax on every penny of my income (barring allowances) and believe everyone else should too. The plea that some "only earn 10-15k" and the implication that their tax fraud is therefore OK is not one I support.

    eBay traders are in a class of their own. Many people earn tens of thousands a year on eBay. Surely no-one is claiming that HMRC should ignore the tax due on that income?

    It's a myth that closing loopholes that allow a few super rich to minimise their liability will build hospitals or leave the poor man paying next to nothing. You could tax high earners at 100% and it wouldn't have a huge impact on the tax bills for the rest of us. After all the Labour Government tried that with their 83% tax rate and merely drove most of the high earners overseas.

    There are two issues:

    Are current tax rates fair?

    Should all tax due be collected?

    I think the answer to both is yes but even if some believe the answer to the first is no, surely it shouldn't lead to tax evasion for some of the lower paid being acceptable? The majority will always pay what is due, those that don't don't should be pursued.

    If you believe that the lower paid should pay less tax, that shouldn't be a rationale for condoing that some illegally pay none.

    Report on 17 February 2012  |  Love thisLove  0 loves
  • Hardtruth
    Love rating 69
    Hardtruth said

    ferdyg you don't read properly. Tell me where in my post I said or even "suggest" it is "OK...to avoid tax". I think you will see I didn't say that at all. My point was different and you missed it.

    Report on 17 February 2012  |  Love thisLove  2 loves
  • teafoo
    Love rating 55
    teafoo said

    Agreed that we should all pay a fair share of tax .. but one point not mentioned is not to do with collection of tax, it is the other side of it.

    Paying tax might not feel so onerous if we all felt that it would be better spent.

    So much of what we pay in taxes is totally and utterly wasted by bad management, squandering on useless projects etc etc.

    Report on 17 February 2012  |  Love thisLove  4 loves
  • ferdyg
    Love rating 13
    ferdyg said

    Yes Hardtruth, it was a very silly little rant with little point to it except to call people working at HMRC "limited intellect" and "bullies". On re-reading I still have no idea what your point is, except to insult.

    Report on 17 February 2012  |  Love thisLove  0 loves
  • Hardtruth
    Love rating 69
    Hardtruth said

    ferdyg not only did you not answer the question but you didn't even re-read properly!

    So again...where in my original post did I say or write:

    - "it is OK...to avoid tax" or

    - "call people working at HMRC "limited intellect""?

    I didn't. As to the point let me write it out long hand for you...

    HMRC has just settled or more accurately caved on some massive outstanding corporation tax demands from significant businesses. In some cases they have taken pennies on the pound of what is due. Add to this allegations of fine wining and dining and "entertainment" of senior public sector personnel by parties with vested interests and it all takes on a rather sinister perspective. Not only is this incompetent it is also indictable. Ergo unfit for purpose.

    Conversely HMRC is putting, one assumes, significant resources into going after tax within the "direct selling" industry. Fair enough even though you wrongly imply I suggest the opposite. These people in many cases are soft and easy targets despite it being questionable as to whether it is money well spent by HMRC because it can frequently cost 5-10X what is recovered. By any business measure this is desperately poor ROI but then this is not a measure routinely applied in the public sector.

    Of course going after corporations or HNW individuals is hard work but also it can have political connotations so oft times easier for HMRC to steer away from difficult work or even better make it go away quickly by doing a quick and grubby. Ergo one who goes after an easy or soft target is a "flat track bully".

    Clear enough for you? It seems only you have struggled to grasp it.

    Report on 17 February 2012  |  Love thisLove  2 loves
  • ferdyg
    Love rating 13
    ferdyg said

    Make up a few conspiracy theories about HMRC, present them as fact, repeat the name calling and "hey presto" a very silly and pathetic rant

    Report on 17 February 2012  |  Love thisLove  0 loves
  • PATRIOT
    Love rating 2
    PATRIOT said

    HMRC should be targeting those greedy criminals who are buying houses and cramming them full with people for rent. The majority of this income is not declared and councils don't seem to be responding to communities being destroyed by HMO's and other set ups.

    Report on 17 February 2012  |  Love thisLove  2 loves
  • Hardtruth
    Love rating 69
    Hardtruth said Report on 17 February 2012  |  Love thisLove  0 loves
  • yocoxy
    Love rating 152
    yocoxy said

    Hardtruth said

    "Sums up everything that is wrong with the unfit for purpose HMRC. Toxic combination of large power and limited intellect"

    then

    So again...where in my original post did I say or write

    - "call people working at HMRC "limited intellect""?

    I also didn't understand the anti HMRC rant but it's a bit pointless claiming you didn't say something that is visible to all a few posts back..

    Oh and I have no idea what a "flat track bully" is..

    Report on 17 February 2012  |  Love thisLove  0 loves
  • Hardtruth
    Love rating 69
    Hardtruth said

    Give me strength...yocoxy the subject is HMRC. It is written in the previous sentence as you included it, that's your clue. Let me help you - remove the full stop at the end of the previous sentence, add "a" and you get:

    "Sums up everything that is wrong with the unfit for purpose HMRC, a toxic combination of large power and limited intellect". It was written about the institution - doh! It is not difficult to understand or so I thought.

    Just like ferdyg you also try to twist words and meanings as evidenced in your first posting. Pretty objectionable really when you misrepresent others.

    As to "flat track bully" you must live in a shell if you don't know what it is. You can always try Google. You have heard of that I assume. The first return will be dictionary.com. Jeepers.

    The case for HMRC incompetence is clear and made - I notice you and ferdyg choose to focus on the minutiae and the real substance flies over your heads it seems. Pedants...

    Report on 17 February 2012  |  Love thisLove  3 loves
  • yocoxy
    Love rating 152
    yocoxy said

    Ahh ok, so you think HMRC has limited intellect but not the people who run the organisation? Then I apologise for misunderstanding your misleading grammar.

    Your first sentence is ambiguous since you refer to "HMRC" it wasnt clear whether you were referring to the organisation or the people. Your next sentence is "they go after the little people". Since the organisation is singular and inanimate, (it, not they) This sentence refers to the people not the organisation. Your last point in that paragraph is "they do grubby deals", clearly again referring to the staff. I don't think it's a leap of logic for your readers to conclude that you referred to the staff having limited intellect.

    I made all the points I wanted to make in my original post. The key one being that everyone should be pursued for their tax and I disagree with your implied point that tax evasion by people earning £10-15k is OK.

    I only made my second post because I thought your tone against Ferdyg was unnecessary.

    I'd be interested to run a poll here to find out how common usage of the phrase "flat track bully" is. I'd never heard it but I don't think your logic or tone that I may therefore not have heard of Google is neccessary.

    For those that also don't know the phrase, I Googled it. The top hit on Google was Dictionary-reference.com which tells me that it is a noun meaning "A sportsperson who dominates inferior opposition but cannot beat top level opponents"

    I assume one usage could be to describe someone with limited talent and a misplaced sense of superiority. How appropriate..

    Report on 18 February 2012  |  Love thisLove  0 loves
  • SeaBee
    Love rating 15
    SeaBee said

    It's about time that HMRC investigated car-boot sale traders as well as those on e-Bay.

    Report on 09 April 2012  |  Love thisLove  0 loves

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