Thursday 22 December 2016

HMRC Recovers £400m Extra Income Tax After Crackdown On Avoidance

HMRC

HMRC's tough new policy on tax avoidance led to extra income tax receipts of £400m this year, according to new figures released by the Government.

The taxman's crackdown on avoidance schemes led to the HMRC Counter Avoidance Directorate collecting £886m from people who had tried to avoid tax by signing up to schemes, according to figures released after a freedom of information request.

This represented an 80pc rise on the £494m taken during the previous 2014-15 financial year, a figure released after a separate freedom of information request in May. The Counter Avoidance Directorate was formed in 2014 to tackle income tax avoidance.

The tax office has become tougher on avoidance in the past two years. "Accelerated payment notices", which were introduced in 2014, require the recipient to pay within 90 days.

Last week it emerged that of 60,000 notices issued, 3,000 had been recalled by the taxman. Nevertheless, the notices have raised £3bn since their introduction.

Paul Noble, tax director at law firm Pinsent Masons, which made the freedom of information request, said: "This is part of crackdown as the Government tries to make it harder to avoid tax, and is the result of various new tools that they have started to use, one of which is the accelerated payment notice."

The Finance Bill, which will be introduced next year, also includes tougher penalties for accountants and advisers who promote suspect avoidance schemes.

In the Autumn Statement, the Chancellor, Philip Hammond, said the new anti-avoidance measures would raise £2bn in total for the Government.

Last month hundreds of celebrities were told to pay penalties connected with the "Eclipse 35" avoidance scheme, which involved Hollywood films. Many of them will have to repay amounts totalling many times their original investment.


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