The UK tax authority, HM Revenue and Customs, intends to spend GBP1bn – about one quarter of its entire budget – on compliance and enforcement activities in a bid to claw back GBP2.4bn in revenues for the over-spent Treasury.
HMRC’s mission to “relentlessly pursue” those taxpayers who knowingly flout the rules was outlined in the department’s Business Plan for 2009/10 and buttresses a raft of new anti-avoidance measures announced by Chancellor of the Exchequer Alistair Darling in the 2009 budget on April 22.
“In the current difficult economic climate, it is more important than ever that HMRC helps and support customers fulfil (their) obligations while relentless pursuing those who bend or break the rules,” wrote Lesley Strathie, HMRC Chief Executive.
“We will do this by using new IT tools, dedicated expert teams, new powers and penalties, information given to us by the public, and through the courts,” she added.
HMRC also promises to “respond robustly” to tax avoidance through investigation and legal action, and will advise government ministers on legislation to close down avoidance schemes.
The department will also establish a High-Net-Worth Unit to deal with wealthy taxpayers and build a better understanding of their particular needs.
On April 1, a compliance checks framework came into force giving HMRC inspectors a single set of powers to inspect business records, assets and premises.
The government also announced a battery of other measures in the last budget designed to encourage greater levels of compliance and extract as much revenue out of the tax system as possible over the coming years. These include the naming and shaming of serious tax defaulters, new reporting requirements for tax delinquents, and new legislation reducing the scope for avoidance of tax in several areas, including, among others: ‘disguised’ interest; foreign exchange transactions; double tax relief; complex financial products; and national insurance contributions.
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