Riding instructors who do not declare their earnings have been given an ultimatum — to put their affairs in order or be fined.

HM Revenue & Customs’ (HMRC) latest “tax cheat campaign”, announced on 13 June, targets private tutors, including riding instructors who give private lessons.

HMRC says it will use various intelligence sources to pinpoint offenders, including a sophisticated web “robot” — which scours the internet for anomalies in bank interest and lifestyle indicators.

The HMRC’s Mike Wells said: “It will be more expensive if we come and find people, so I urge them to come forward and disclose voluntarily.”

Stephen Barratt, a director in private client and rural business at accountancy firm James Cowper LLP in Newbury, warned riding instructors “not to ignore this clampdown”.

Equine tax affairs are notoriously complicated — the dividing line between hobby and business can be difficult to draw.

“The best thing is to maintain records,” he added.

The HMRC is urging people to come forward if they believe they owe tax and thereby avoid a penalty surcharge of around 10-20% of the amount due.

The deadline to do so will be late this year or early in 2012.

When H&H polled several riding instructors, most were not worried by the clampdown.

“It’s the same in any business where you can be paid in cash, so I can see why [HMRC] is doing this,” said one. “Many of us have an accountant to sort the financial side out.”

This news story was first published in the current issue of Horse & Hound (7 July, 2011)