Dog breeders, pet sellers and waste-management firms will be forced to register for tax before they can obtain or renew their licences, under a government crackdown on the black economy.
An estimated 520,000 workers in those industries who are usually paid in cash will be affected.
HMRC is set to get tough on jobs where it believes tax evasion is rife, saying they are “vulnerable to hidden economic activity”, in part because of the large number of sole traders.
Tax chiefs say the black economy is booming while the regular economy stagnates, The Times reported.
New figures on Thursday are expected to show the economy at risk of falling into a recession after GDP fell back in the fourth quarter of last year as business and consumer confidence slumped.
In 2022 new rules required taxi drivers and scrap-metal dealers to be registered with the taxman to obtain or renew their licences, which HMRC forecasts will generate an extra £260m over the next five years.
Expanding this to pet breeders and sellers and waste companies is expected to result in even greater income for the Treasury.
The National Centre for Social Research attributes the expansion in the black economy to the rise of freelance work, also known as the “gig economy”, and the impact of the pandemic on employment.
High levels of illegal migration since 2022 have been linked to a rise in working for cash, and the Home Office has said for the first time that small-boat migrants are working in the black economy.
Immigration-enforcement officers raided 828 business premises and made 609 arrests in January, a 73 per cent rise on the same month last year and the highest monthly figure recorded.
The Home Office said that in many cases small-boat migrants were “sold false promises” by people-smugglers about their ability to live and work in the UK. The government said that a significant proportion of last month’s enforcement activity took place at restaurants, takeaways and cafes.
An estimated 100,000 people are thought to work delivering food and groceries via food delivery apps for companies that are not required to provide proof of being registered for tax.
