British Tax System Uses Web Robots To Find Cheats 190
judgecorp writes "HM Revenue & Customs (HMRC) is extending its campaign against tax cheats with the news that it will use web robots to trawl cyberspace. The system will check eBay and Google to identify traders who aren't declaring all their earnings. From the article: 'The decision to target cyberspace to hunt down those evading tax comes as HMRC continues its campaign to recover around £7 billion lost to the Treasury each year. It is thought that this latest development, the use of ‘web robots’, will help HMRC track down rogue eBay and Gumtree businesses, as well as people earning second incomes by acting as private tutors. It will also help it hunt down so called cash-in-hand handymen and traders.'"
Re:I like how they think people actually owe them (Score:5, Informative)
the USA has had a deficit for almost every year of its existence
That's not only completely false, it would be misleading even if it were completely true. There have been several dozen years during which the debt was paid down at least slightly, and many others in which the increase in GDP far outweighed the increase in the debt. On that last point, I'm not saying anyone should ever count on growing their way out of debt (as a few of the more delusional Republican potential candidates, especially Pawlenty, seem to advocate today), but it's perfectly reasonable for a fiscally stable government to borrow some money in periods of preexisting economic growth, and of course there are times when you can cause economic growth by spending borrowed money in the right places.
So in a word, no. The US government has not spent substantially more than it took in throughout most of it's history, or when it did economic growth or fiscal responsibility closed the gap in following years. The only times we've had truly massive debt spikes were major wars, and the last thirty years of total irresponsibility. And that irresponsibility caught up with us about five years ago, truth be told. Most politicians are barely edging their way around to admitting the possible existence of a problem right now, but this crap reached crisis levels a while ago.
No government can spend more than it takes in for any impressively long time, and it certainly isn't the regular order of things.
Re:"Cheating the Government" (Score:5, Informative)
Re:I like how they think people actually owe them (Score:4, Informative)
What you "know" is incorrect. The interest we pay on the national debt is $251B. The total revenue from income taxes is $1121B. And that doesn't count other taxes, such as corporate or excise taxes. If you tally up all of the United States revenues (excluding Social Security taxes), you get $1633B, more than six and a half times the debt interest.
Additionally, the long term trend (average over the previous decade) is that the debt is for the interest payments to grow at half the rate at which revenues are growing.
There's a lot of fear mongering going on about the American economy. It's very persuasive, but most of it is based on lies. We should absolutely reduce spending. We should also raise revenues. Repealing the Bush tax cuts, trimming back on military spending, removing the tax cap for Social Security, and applying some form of means testing to SS & Medicare are all reasonable approaches. Just don't find yourself falling for the FUD that we need to privatize everything right away or go bankrupt, because it's simply not the case.
Source [wallstats.com]
Re:Good. (Score:5, Informative)
At least in the UK I would think the majority of people already pay 'every last penny they're "supposed" to owe.'
We have something called PAYE which every employer uses to (hopefully) correctly take income tax at source.
Interest and dividends are also taxed at source and for basic rate taxpayers there will be no additional tax to pay. People who don't reach the income tax threshold can submit a form R85 to their bank/building society to receive their interest without tax deducted. Dividend tax cannot be reclaimed any more - this was "Gordon Brown's great pension heist" that is oft talked about.
Higher rate tax payers do have some extra tax to pay but HMRC applies a "fudge factor" (tax coding) to the PAYE system to balance it out. For example my tax code consists of a component for the tax free allowance, a component for tax relief on pension contributions, a component for tax relief on charitable giving and a component for the tax due on health insurance benefits. You get a letter from the tax office explaining how your tax code was calculated and you can ask to have the calculation redone if you think the numbers aren't correct.
At the end of the year, for most people, this is so close to being right that nobody, neither HMRC, nor the taxpayer, wants the hassle of "fixing" the errors of a few pounds here and there.
For some people HMRC requires them to submit a tax return at the end of the year. For these people there will be a balancing payment made or received and the tax will be exactly correct.
Additionally, anybody is allowed to submit a tax return if they want. I would estimate that for a standard employee (maybe with multiple jobs) this amounts to about 1-2 hours of work total - your employer is required by law to give you certain forms, P11D, P85, and you just have to copy these numbers into your tax return. Then it's just finding all those bank accounts and totting up all the interest (again, the bank should give you a certificate of interest paid and tax deducted but with modern online banking you tend to have to remember what accounts you've got rather than receive something through the post to remind you.) Ditto dividends.
Do it online and you get the tax calculation instantly. If you owe tax then you'll have to pay it by 31st Jan of the following year. if you're overpaid tax then, IME, you'll get the money paid into your bank within a month of submitting the tax return.
It's only when you have other sources of income that fall outside the PAYE system that there is even the opportunity for tax evasion (short of outright lying - for example you could claim to make 10K of charitable donations but not make them which would only be caught if/when the taxman does an audit)
Tim.
Re:Never mind Vodafone (Score:4, Informative)
HMRC's press office dismisses the £6bn tax write-off as an "urban myth". But the Eye's calculations on the lost income are based on publicly available accounts which detail the vast wealth of Vodafone's Luxembourg subsidiary. They add in the lost income that comes from the Revenue allowing Vodafone to continue with other tax-reducing wheezes. The Revenue, by contrast, offers questioners nothing beyond bluster and unsubstantiated assertion.
Translation: the headline £6bn figure is only partially made up of the money HMRC said they hadn't been paid and they got that money in court. The rest of the money wasn't paid because they'd used legal means to pay less tax.
There's a difference between that and just not paying taxes as required by the law.