The necessary security will tend to be either a cash deposit from the business or director, or a bond from an approved financial institution that is payable on demand. HMR&C will calculate this amount of security on a case-by-case basis, depending on the amount of tax at risk, the employer’s previous behaviour and other factors.

This latest power, an expansion of a power that has already been successfully used for VAT, insurance premium tax and environmental taxes, will be aimed at employers who deduct money from employees’ pay packets, under the pretext of paying their employees’ income tax and NICs, but have no intention of forwarding it to HMR&C. These employers often build up extensive PAYE and NICs debts, and ignore HMR&C’s attempts to contact them. In many cases, the business becomes insolvent, to avoid tax, and sets up a new company soon after, to continue trading.

Businesses that fail to provide a security face a fine of up to £5,000, which will be enforceable by the courts.

Electricians who take advantage of this “disclosure opportunity” via the Electricians Tax Safe Plan will be facing a reduced penalty rate of 10-20% of the tax owed, as opposed to the usual rate of up to 100%.

HMR&C will be using a variety of intelligence sources to target electricians who have not declared their entire income. It will be the same method that they have used previously for the plumbers’ campaign, which resulted in thousands of investigations.

The plan will be aimed at anyone who installs, maintains and tests electrical systems, equipment and appliances and covers any tax owed, for whatever reason.

The information that they are gathering is from a wide range of sources, including online advertising, trade directories, industry bodies, professional ‘electrical safety’ certificates, trade suppliers and tax records. Using sophisticated software, this detailed information enables them to target those who should come forward and use the Electricians Tax Safe Plan.

Those who wish to take part in the plan must come forward by 15th May 2012 and inform HMR&C. They will then have until 14th August 2012 to make their disclosure and arrange for payment.

Trades people working in the home improvement market

HMR&C intends to launch a campaign later in the year, which will build on the campaigns aimed at plumbers and electricians, and will include several hundred thousand trades people in construction and building work such as roofing, window fitting, bricklaying, carpentry and joinery.

Again, HMR&C will offer the opportunity for all targeted people to come forward and penalties will be higher if HMR&C find people out after this opportunity.