The crackdown on tax avoidance in the UK is likely to be extended by HMRC after £494m of UK tax money was clawed back by the authority in 2014/2015, due to investigations into tax avoidance schemes. HMRC have been stepping up their investigations since 2012, following media coverage of tax avoidance, spurring public complaints. They vowed to crack down on more high profile figures like actors, musicians and sports figures.
HMRC created the Counter Avoidance Directorate in April 2014, with the aim of quashing the promotion of tax avoidance schemes in the UK. The Directorate also introduced a range of ways to dispute tax for the HMRC, this includes Accelerated Payment Notices, which forces businesses, or individuals, who are suspected of using schemes, to pay tax within 90 days.
As well as this, HMRC continues to be granted huge new powers to help them close cases on high profile individuals. Paul Noble, the tax director at Pinsent Masons, said that as a result of these powers, “high-net worth individuals and other wealthy taxpayers are likely to face further scrutiny – both here and abroad” he went on to say that “HMRC needs to ensure it makes use of some of its new and more contentious tools in a reasonable way – and focuses on activity which constitutes real abuse.”
HMRC has been back in the spotlight recently due to a number of issues. A recent report, from the Committee of Public Accounts, found that not enough is being done to tackle tax fraud, saying that “only limited progress is being made. On top of this came the Panama Papers leak, which catapulted more complaints towards the HMRC, demanding more crack downs on tax fraud. A recent survey of 1000 people, conducted by HMRC, showed that 63% of participants believed that avoidance schemes were still completely widespread, despite HMRC vowing to crack down on any and all schemes in the UK and off-shore. Last month, HMRC claimed victory against BNP Paribas – held firm Fidex, and secured £17.2m of UK tax money. The authority also claims to make 20 large cases against tax fraud and wealthy individuals each year until 2020.
George Bull, the senior tax partner at RSM discussed the issue of complaints to HMRC, stating that “HMRC personnel, both in management and front-line tax inspectors, must be disappointed at the sustained criticism they have received from parliament’s Public Accounts Committee.” going on to talk about how the authority is forever evolving to become better.