Open consultation – Tackling the hidden economy: expanding tax conditionality to new sectors

The criteria HMRC used to identify new sectors for the potential expansion of tax conditionality are:

• alignment of conditionality with existing rules: licences in scope have existing conditions that align reasonably well with legal obligations to register for and pay tax
• risks posed by the hidden economy: while good standards of overall compliance exist in the sectors selected, they are vulnerable to exploitation by a minority who wish to undercut their competitors by operating in the hidden economy
• potential wider benefits: by integrating regulatory standards and developing closer working between HMRC and other parts of local or national government, there may be opportunities to drive up standards

This consultation suggests expanding the existing tax conditionality check across the UK to specific sectors which HMRC believes would be suitable for tax conditionality to be applied. These are:

• registrations and permits in the waste sector
• licences in scope of animal welfare legislation
• further licences in the transport sector