UK and International Tax news

New Tax Avoidance And Evasion Measures

Saturday 21st August 2010

The Chief Secretary to the Treasury Danny Alexander has announced new plans to tackle non compliance in the tax system and for £900m to be made available over the spending review period to raise additional revenues from those who undermine the tax system and seek to avoid paying their fair share. It is estimated that this should bring in around £7billion per annum by 2014-15 in additional tax revenues. More details on HMRC’s final spending review settlement are to be issued on 20th October 2010.

The £900 million is to allow HMRC to further reduce compliance risks by targeting the following areas:

To make it harder for individuals and companies to avoid tax and working to prevent tax avoidance before it happens. Funding will be available for

• a more robust criminal deterrent against tax evasion – HMRC is to increase the number of criminal prosecutions fivefold,

• a crackdown on offshore evasion with the creation of a new dedicated team of investigators to catch those hiding money offshore,

• deployment of dedicated tax experts to extend HMRC’s coverage of large businesses, focused on providing resources to tackle high-risk areas.

To reduce the amount of tax lost to the Exchequer each year through tax debt. Funding will be available for:

• placing up to £1bn per year of tax debt out to private sector debt collection agencies,
• improving the scope of in-house debt collection.

Organised crime and criminal attack is estimated to contribute around £5bn a year to the UK tax gap. Over the spending review period funding will be available for:

• more registration checks to stop people claiming tax repayments when they are not due,
• the creation of bespoke cyber crime teams and specialists to help prevent criminal attack on HMRC’s electronic systems,
• more investment in freight and detection technology to prevent alcohol and tobacco smuggling.

The Government had previously announced steps to tackle non-compliance in the June 2010 Budget, including using debt collection agencies to collect £140million of additional revenue during the current financial year. This new package will build on this and HMRC is to start implementing these proposals immediately.

If you would like further information on the above, please contact Keith Rushen on 0044 (0)20 7486 2378.

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