“We are coming to get you and you will pay your fair share”. These were the ominous words of Danny Alexander this week regarding the increase in scrutiny from HM Revenue & Customs regarding our nation’s ‘tax avoiders’.
From a recent discourse from the Chief Secretary to the Treasury, the government is “on track” to raise approximately £4bn this tax year through a series of initiatives aimed at clamping down on those avoiding paying sufficient tax.
With a clear increase in scrutiny regarding any form of perceived tax dodging splashed over the tabloids these past months (public sector IR35 status and offshore financial investments being a recent example) the HMRC is very openly imposing a long awaited ‘crackdown’ regarding tax avoidance.
At the Spending Review of 2010, a £900m increase was announced in extra resources for HMRC to identify and investigate tax dodgers, and since then the effects of the decision have been swiftly realised.
The amount of HMRC pressure throughout the business sphere has soared, with contractors seeing IR35 activity increasing prolific rate compared to past years.
New government and tax laws have affected HMRC’s recent pledge, the Coalition having vowed to raise an estimated £9bn by tackling tax avoidance by as early as 2015.
The number of staff dealing with tax-evasion will be doubled as part of a crackdown on those "hiding" assets in offshore havens, and this significant increase echoes the recent dramatic rise in public sector workers and contractors status analysis.
In an update on the issue, Alexander said the UK was making "good progress" which "we should all be proud of". The Treasury Secretary went on to add, "Fair taxes in tough times means that everyone should be playing by the same rule book, and everyone paying their fair share.”
This intense increase in both HMRC resources and active pressure is an alarm bell for anyone at risk of a tax investigation. Although IR35 is a piece of legislation designed to prevent abuse as opposed to strictly anti-avoidance, those who are either inadvertently or deliberately putting themselves at risk to HMRC scrutiny are advised to seek either advice or assurance as soon as possible to avoid the possibility of an enquiry.
Ask away! One of our team will get back to you!