NEW CONFIDENTIAL ADVICE LINE TO HELP PEOPLE INTO LEGITIMATE WORK

People in the informal economy can now find out where they stand before tough new measures come in next year - that was the message from Chancellor Gordon Brown, Social Security Secretary Alistair Darling and Paymaster General Dawn Primarolo as they launched a confidential tax and benefits advice line today.

The Ministers launched a major national advertising campaign to encourage those working in the informal economy to put their affairs in order. They said that legislation would be brought forward to introduce a new statutory offence of evading income tax to be tried in a magistrates court. Other measures are to come into force in the new year.

The advice line - 0845 608 6000 - is one of the recommendations made in Lord Grabiner QCs recent report on the informal economy, and will offer callers confidential help and information to help them put their affairs in order.

The Chancellor said:

Lord Grabiner's report suggested that billions of pounds have been lost to the informal economy, leaving the law-abiding majority to foot the bill for people who either don't pay their taxes or claim benefits they are not entitled to. I welcomed his recommendations at the time and said there would be no hiding place for those who failed to move into the legitimate world of work.
Today we are launching Tax and Benefits Confidential, our new advice line - 0845 608 6000 - which provides confidential advice so that people can put their affairs in order and find out how they would benefit from moving into work.
But with these rights come new responsibilities too, and tough new penalties for those who fail to meet them. We will bring forward legislation to introduce a new statutory offence of evading income tax which can be tried in a magistrates court and which will come into force in the new year.
We will also be acting on Lord Grabiner's other recommendations including new powers for investigators to trace those working in the informal economy via their phone numbers, and the requirement to notify the tax authorities when setting up in business.
Our message to those in the informal economy is clear: take the first step and find out how you can get your affairs in order. The advice line is completely confidential and you will receive straight forward advice about how to sort your affairs out.
It's up to you if you take things further but, if you fail to do so, you will face new penalties from next year.
Our message to honest, hard-working tax-payers who play by the rules is that we're on your side and taking action to prevent you being defrauded

It's the end of the line for tax and benefits cheats, said Alistair Darling:

We are determined to tighten up the benefit system to stop abuse. That's already bearing fruit with social security spending increasing at the lowest rate ever.
There is no excuse for people to be working and claiming. Benefit fraud costs us all - ,80 is taken from every household in Britain each year. This helpline is the last chance for those fiddling the system to put their affairs in order - it will give advice about the support and benefit help available for those not lurking in the informal economy.
We are already tough on fraud. Last year the DSS increased sanctions taken against fraudsters by 45 per cent to 20,379. And we are going to get even tougher. We intend to introduce tough new measures to impose >two strikes and you're out and we will be increasingly working across Government to root out the cheats.
If you are cheating, we'll find out. So if you are caught up in the informal economy, ring the confidential advice line now. It's the end of the line if you don't

A factsheet giving further details of the advice line is attached.

Notes to Editors

The advice line is one of a series of measures to tackle the multi-billion pound informal economy, recommended by Lord Grabiner QC in his report >The Informal Economy published in March.

The advice line will be open from 8am to 8pm Monday to Friday and from 8am to 5pm Saturday and Sunday. Calls will be charged at local rates. Specially trained advisers manning the phone lines will:

work out how much tax and National Insurance a caller would expect to pay based on their declared profits;
work out the likely entitlement to Working Families Tax Credit or other in-work benefits based on callers circumstances;
tell callers where they can find help with setting up a business and getting their paperwork in order for the future.

If the caller decides to register for tax they can do so there and then, and arrange for their details to be forwarded to their local tax office. Alternatively, if callers wants time to think over what they have been told, they will be offered a reference number and a password so that the operator can refer back to the notes of the earlier conversation, if a caller decides to ring back.

A ten week advertising campaign will begin on Monday June 26th with full page press adverts in the Sun, Mirror, Star and the Record. Further national press advertising will take place throughout July and August. Regional advertising will form part of the campaign. Press and radio commercials will appear in local media throughout the UK.

The further measures to come in to force in the next year include:

a new statutory tax offence of fraudulently evading income tax which can be tried in a magistrate's court;
new powers for investigators to trace those working in the hidden economy via their phone numbers;
a new requirement to notify the tax authorities when businesses are set up;
requirements for more frequent attendance at job centres;
two strikes and you're out penalty for benefit fraudsters.

TAX AND BENEFITS CONFIDENTIAL - QUESTIONS AND ANSWERS

Why has the helpline been set up?

To enable people to put their affairs in order. It will provide them with information about the opportunities that exist in the regular economy and how to take advantage of them. It will also provide detailed information on where they stand in relation to past tax or benefit problems.

What is the extent of the problem?

Lord Grabiner reported that on the benefits side an estimated 120,000 people are 'working and claiming' and that they were wrongly obtaining at least ,450 million a year in benefits. In relation to tax, Lord Grabiner said that he was sure the assumption that the hidden economy involved billions of pounds was reasonable.

Who can call the helpline?

Anyone who is working in the informal economy= - that is, not registered for tax and are therefore unknown to the Inland Revenue. They may also be incorrectly claiming benefits.

What sort of advice will be given?

The helpline can:

tell the caller how to go about registering with the Inland Revenue;
work out someone's entitlement to WFTC or other in-work benefits;
tell the caller what they need to do about paying National Insurance Contributions that may affect future rights to state pension and some other benefits;
if the caller has been in business for some time they will work out how much tax and National Insurance a person would expect to pay based on declared profits;
tell the caller whether they have been claiming benefits to which they are not entitled and what to do about it; callers will be advised to stop drawing the benefit immediately and to contact the Benefits Agency.

Can people ring on someone else's behalf?

Yes, the advice line will be able to give general advice on behalf of a friend or relative.

Why a separate helpline, can people not call their local tax office?

Despite all of the support available, some people remain stuck in the informal economy. Often the reason is that they think they are in more of a mess with their tax or benefits than is really the case. The advice line gives them the opportunity to find out on a confidential basis exactly where they stand and what arrangements they need to make to move to the legitimate world of work.

Do callers really not have to give their name?

The helpline has been set up to operate on a confidential basis. Obviously if callers wants a leaflet or form sent out to them, they will have to leave a contact name and address but otherwise there is absolutely no pressure to give a name.

Can callers ring off and ring back another time?

Callers can terminate the call at any point. If they want to ring back when they have had time to think a bit more about their situation, the advice line will give them a reference number to quote when they call again.

Are the calls being taped?

No. But the operator will make a written note of the key elements of the conversation so that each side will know where they stand. In particular, that will mean callers will be able to rely on what they are told by the advice line.

Will the advice line try to trace callers from their phone call?

No, this will never happen. The advice line is being set up to receive calls on a no-names basis and no attempt will be made to trace the calls.

What will the Revenue do with the information they receive from callers?

Where callers identify themselves and say they want to regularise their tax affairs on the basis set out by the advice line, they will be sent a letter setting out what they told the advice line about their circumstances and what that means for their tax and NIC position (as explained to them on the advice line).The letter will tell them to contact their local tax office (identified in the letter) so that taxpayer records can be set up for them. So long as callers have been frank with the advice line, the tax treatment offered by the advice line will not be disturbed by the local office.

Obviously if the caller does not choose to identify themselves, then the Revenue can do nothing with the information (though the advice line will hang on to their note of the call in case the caller rings back later for more information or to identify themselves).

What happens if someone calls to inform on someone else?

The helpline will take the details from the informer which will be passed onto the appropriate people within the Revenue. Confidentiality rules of course prevent the informer from being given any further information, say about any investigation launched as a result. In appropriate cases, informers will be given the numbers of the dedicated Benefits Agency and/or Customs hotlines for informers.

Press Notices 2000 January to June index