Dodgy traders looking to cash in on the July 30 Ashes Test at
Edgbaston have been sent a warning - the taxman is after
you. And the same is true of homeowners on the make.
With tax revenues falling, HM Revenue & Customs (HMRC) has
been taking a closer interest than usual in individuals profiting
from the big summer events like the England v Australia cricket,
Wimbledon, the British Grand Prix, and the many music festivals
taking place across the UK.
Indeed PKF Accountants & business advisers say events such
as the recent Wimbledon fortnight are now so big they virtually
have their own economy.
Wimbledon residents can earn thousands of pounds renting out
their homes during the tournament to either stars or fans. There is
also bumper demand for off-road parking spaces in gardens and on
golf courses in the area. Many traders also sell drinks, food and
souvenirs to passing fans from stalls on private residential
property in the vicinity.
Much the same is true for big rugby matches at Twickenham, and,
though far less pronounced, there is also thought to be an element
of cashing in when Test matches come to Edgbaston.
HMRC has increased its information-gathering powers and is known
to work with the organisers of major events and third parties like
letting agencies, to check up on traders and temporary landlords.
HMRC investigators now operate in 'cross-tax teams' and with many
other government enforcement agencies - often leading to combined
visits to the premises of suspect businesses.
Simon Littlejohns, tax partner in the Birmingham office of PKF,
said: "HMRC wants its share of the events economy.
"HMRC officers and trading standards teams often visit big
sporting venues and the area around them to check up on traders and
residents making money on the side.
"So if homeowners and others around Edgbaston think a killing is
to be made out of the battle for the Ashes then they are in danger
of coming a cropper.
"The community of traders that provide catering and other
services to large events is well known to HMRC. Those it sees as
high risk are likely to face checks to ensure that all casual
employees are taxed correctly on their earnings and that those
traders do not breach the minimum wage regulations.
"Anyone who is having a tough time and is tempted not to declare
the income they receive, should be aware that HMRC's new system of
tax penalties took effect from April this year. If you cheat and
you are caught out it is now likely to cost you far more than it
would have in past years.
"However, it will still cost less to make an 'unprompted
disclosure' of any tax irregularities - so if you have failed to
report income in the past, it is best to do so before HMRC catches
up with you."