Further Crackdown expected from HMRC on high net worth tax
Pinsent Mason have reported that the HM Revenue & Customs recent crackdown on tax avoidance is likely to be extended with the government having caught half a billion pounds extra since they started the campaign.
According to a Freedom of information requested by the law firm, HRMC reported that they collected £494m worth of income tax between 2014 and 2015 through their investigations into tax avoidance schemes.
Paul Nobel, the Tax Director for Pinsent Mason had warned advisers and accountants to beware of this success.
“High-net worth individuals and other wealthy taxpayers are likely to face further scrutiny as a result – both here and abroad”
HMRC has stepped up their investigations since 2012 especially following the extensive media coverage of celebrities participating in such activities, targeting actors, musicians, sports starts and comedians.
In April 2014 the Counter Avoidance Sirectorate was created to crack down on the use and promotion of such avoidance schemes and HMRC has also published a list of arrangements which run contrary to its rules.
Tougher powers have be introduced to find and demand disputed tax. The accelerated payment notices, which have caused some controversy have been part of these, where upfront payment of the tax under question within 90 days when the use of an avoidance scheme is suspected.
HMRC continue to be given new powers and tools to help them crack down on these avoidance cases.
HMRC has seen a surge in returns from investigations into tax affairs of high net worth individuals. The past year has seen an income of £29 for every £1 spent on the investigation process. That is a 60 per cent increase from 2014’s investigations.
£414m has been collected from the high net worth unit, which covers 6,000 individuals who have a net worth of £20m or more in 2014/2015.
The Committee of Public Accounts has concluded in their reports that the HMRC however are not doing enough to tackle tax fraud. They believe that “only limited progress” has been made in reducing losses through the crime.
Tax avoidance and evasion has once again been in the spot light recently with the leak of the “Panama Papers”. With everyone from the Prime Minister to actress Emma Watson named in these papers. The Financial Conduct authority has sent information requests to 64 implicated firms so far, but refused to be drawn on its preliminary findings.
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