Independent practitioners have been warned of an increased risk of being targeted for a tax investigation in the wake of high publicity HM Revenue and Customs’ (HMRC’s) court cases against
Doctors’ advisers say HMRC’s investment in a £45m database that collects information from multiple sources may now start paying off as it starts pinpointing areas and types of businesses where tax underpayment is a problem.
But accountants Humphrey and Co warned that there is also a risk that this is resulting in innocent taxpayers being targeted for investigations.
It cited reports that HMRC uses social media to build up a more detailed picture of an individual’s lifestyle, such as social media boasts about expensive cars or even holiday pictures.
These could trigger an inquiry if they do not fit with the individual’s reported income.
In a message to clients, the Eastbourne firm said: ‘While some of those targeted may be guilty of tax evasion, many more are likely to be innocent.
‘Individuals and businesses may find themselves on the receiving end of a mass mailshot from HMRC asking them to review their taxes simply because they fit a particular profile.
‘More unwelcome still, they may even find themselves singled out for a full investigation on the basis of a snippet of information for which there is a straightforward explanation.’