HMRC have hired an extra 200 investigators in the past three years, taking the total to 1,600. The Daily Telegraph discovered that the number of tax investigations has doubled in the past tax year to 237,215 in a bid to recoup the £35 billion of income tax lost each year. The number of annual prosecutions has gone up seven times in the last three years and the number of investigations into self-employed people has multiplied by four.
Tax experts are becoming increasingly concerned that people who have made mistakes on sometimes complicated self assessment tax returns are easily intimidated into paying without question. Mark Giddens, a partner at accountancy firm U.H.Y. Hacker Young, said that “teachers, doctors and lawyers” are the “soft targets” being pursued by HMRC. This is because they are more likely to be stressed into paying a bill straightaway, rather than dispute its fairness. Many genuine mistakes involve misunderstandings about capital gains tax, jointly owned properties and second properties. David Lawrenson from Lettingfocus.com said, “There is a great deal of uncertainty among landlords about what expenses can be offset against income.” You are trying to pay the correct amount of tax so let us cut the confusion and avoid mistakes from the start, contact Tax Rebate Services.
Tory MP Brooks Newmark on the Commons Treasury select committee said that HMRC had been “given a mandate to aggressively go about trying to collect tax” and that “people in middle England are easy targets”…”there are some errors there that HMRC may in previous years have left or not necessarily picked up, but are now nit-picking”. Newmark also pointed out that there is a difference between a one off genuine mistake and a repeated pattern of tax avoidance over consecutive years. HMRC should treat each type of case appropriately, not apply the same heavy-handed, stressful tactics to both.
This strong-arm attitude seems to be endorsed by the government as it included new powers for HMRC to remove money directly from taxpayers’ bank accounts in this year’s Budget.
A spokesperson HMRC said that the number of cases had gone up because it was holding more compliance inquiries and these “are only opened where we believe there may be a problem causing the wrong tax to be paid”.
