News: 27th May 2014

HMRC's tax avoidance crackdown yields £23.9bn in additional tax

HMRC's tax avoidance crackdown yields £23.9bn in additional tax

HM Revenue and Customs (HMRC) has revealed it raised a record £23.9bn in additional tax for the year to the end of March 2014, as a result of a crackdown on tax avoidance.
 
HMRC confirmed it had secured the money – the highest retrieved figure since records began – as a result of “increased activity” for additional compliance investigations.
 
The figure retrieved is almost £1bn higher than the target initially set by Chancellor, George Osborne in his 2013 Autumn Statement.
 
Treasury minister, David Gauke, said: “HMRC will pursue those seeking to avoid their responsibilities and will collect the taxes that are due.
 
“The government is determined to tackle the minority that seek to avoid paying the taxes they owe.”
 
HMRC revealed that, of the total amount raised, more than £8bn came from large businesses, £1bn from criminals and £2.7bn from tackling avoidance schemes in courts.
 
In total, HMRC anticipated securing £100bn between May 2010 and March 2015 as a result of upscaling its investigations into unpaid tax.
 
The “tax gap” – the difference between the amount of tax due and that collected – was seven per cent for the 2011-12 financial year, the most recent figures available.
 
Tax avoidance currently costs the taxpayer around £4bn a year – almost as much as illegal tax evasion (£5.1bn). Together, they account for around a quarter of the £35bn that is lost to the Treasury every year; otherwise known as the “tax gap”.
 
Tax-saving advantages continue to exist, such as putting money into a pension scheme, donating to charity via gift aid, or claiming capital allowances on things used for business purposes.
 
However, HMRC says tax relief and rules are open to abuse.
 
“Tax avoidance is bending the rules of the tax system to gain a tax advantage that Parliament never intended,” said an HMRC spokesman.
 
“It often involves contrived, artificial transactions that serve little or no purpose other than to produce a tax advantage. It involves operating within the letter – but not the spirit – of the law.”



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