HMRC’s commitment to ‘relentlessly pursue those who do not comply’ should leave no-one in any doubt that this is a long term objective – the clampdown is here to stay. The government is desperate to increase tax revenues, and tackling avoidance and evasion is a good way, supported by the majority of voters. HMRC collected £2bn more than its target last year, and targets will be raised for future years.
Where avoidance is concerned, HMRC is looking to the new general anti-abuse rule for assistance, and it will be interesting to see the first indications of how this will be used in practice.
HMRC’s efforts to counter evasion are now also assisted by similar action being taken at an international level, including increased information exchange procedures and initiatives such as FATCA. The pressure on offshore financial centres to show transparency in relation to corporate and trust structures will also continue and is supported by HMRC policy. The information flowing to HMRC from other countries under new agreements is likely to take many years to process and should lead to a steady flow of investigations, with some potential prosecutions.
An increasing use of advanced information (IT) technology will help HMRC to use this data effectively and target resources for investigations. Risk profiling continues, and its effectiveness has already been reflected in the results of HMRC’s high net worth individuals unit. An indication of HMRC’s intention to use IT properly and effectively was the recent appointment of the former Vodafone chief information officer to oversee the implementation of its new £200m digitisation programme.
HMRC is also creating a new centre of excellence to tackle offshore evasion which, together with the various international initiatives, will make life increasingly difficult for those who try to hide assets overseas. HMRC has investigated offshore structures and bank accounts for many years so pooling the expertise and experience in a centre of excellence makes obvious sense. This should be a warning shot for those tax evaders who have not yet taken advantage of disclosure opportunities such as the Liechtenstein disclosure facility.
Tax investigation specialists can expect to be kept busy, with the business plan confirming the continued use of targeted campaigns, including 30 more taskforces in 2013/14 and 2014/15.
Although heavy handed debt collection powers are needed for some cases, debt collection can be a difficult area, especially in relation to tax credits, where the least able to afford a heavy tax bill are hit the hardest. The debt collection agency trial for collecting tax credit debts which is mentioned in the business plan therefore needs to be carefully and sensitively managed.
Safeguards are needed to protect vulnerable and unrepresented taxpayers, and it is to be hoped that HMRC’s business plan commitment to ‘support customers who have temporary difficulties by allowing them time to pay’ will be reflected by the agreement of reasonable and practical payment plans in everyday practice.
HMRC’s commitment to ‘relentlessly pursue those who do not comply’ should leave no-one in any doubt that this is a long term objective – the clampdown is here to stay. The government is desperate to increase tax revenues, and tackling avoidance and evasion is a good way, supported by the majority of voters. HMRC collected £2bn more than its target last year, and targets will be raised for future years.
Where avoidance is concerned, HMRC is looking to the new general anti-abuse rule for assistance, and it will be interesting to see the first indications of how this will be used in practice.
HMRC’s efforts to counter evasion are now also assisted by similar action being taken at an international level, including increased information exchange procedures and initiatives such as FATCA. The pressure on offshore financial centres to show transparency in relation to corporate and trust structures will also continue and is supported by HMRC policy. The information flowing to HMRC from other countries under new agreements is likely to take many years to process and should lead to a steady flow of investigations, with some potential prosecutions.
An increasing use of advanced information (IT) technology will help HMRC to use this data effectively and target resources for investigations. Risk profiling continues, and its effectiveness has already been reflected in the results of HMRC’s high net worth individuals unit. An indication of HMRC’s intention to use IT properly and effectively was the recent appointment of the former Vodafone chief information officer to oversee the implementation of its new £200m digitisation programme.
HMRC is also creating a new centre of excellence to tackle offshore evasion which, together with the various international initiatives, will make life increasingly difficult for those who try to hide assets overseas. HMRC has investigated offshore structures and bank accounts for many years so pooling the expertise and experience in a centre of excellence makes obvious sense. This should be a warning shot for those tax evaders who have not yet taken advantage of disclosure opportunities such as the Liechtenstein disclosure facility.
Tax investigation specialists can expect to be kept busy, with the business plan confirming the continued use of targeted campaigns, including 30 more taskforces in 2013/14 and 2014/15.
Although heavy handed debt collection powers are needed for some cases, debt collection can be a difficult area, especially in relation to tax credits, where the least able to afford a heavy tax bill are hit the hardest. The debt collection agency trial for collecting tax credit debts which is mentioned in the business plan therefore needs to be carefully and sensitively managed.
Safeguards are needed to protect vulnerable and unrepresented taxpayers, and it is to be hoped that HMRC’s business plan commitment to ‘support customers who have temporary difficulties by allowing them time to pay’ will be reflected by the agreement of reasonable and practical payment plans in everyday practice.
