HMRC’s extra funding + new powers = £7.2 billion extra tax revenue.
That is the figure given by the Chancellor after investing £750million in HMRC and granting a host of new tax collection powers within the 2015 Summer Budget. This forms the government’s two-pronged solution to meeting targets for tax evasion prosecutions.
Mr Osborne intends that the cash injection will enable HMRC to investigate three times more tax evaders and go after those who deposit their money into offshore accounts.
The scope and multitude of the new authorisations are captured by one tax official who described them as a “tsunami”. Just two examples illustrate the range of powers HMRC will now be able to deploy. There is a new charge which can be brought against individuals and companies who assist in tax evasion; not just the individual accused. Also, taxpayers will no longer be able to claim accidental evasion as part of their defence under the new rule of “strict liability”. This will now only be considered if the person has the HMRC definition of a “reasonable excuse”.
There may be some offshore tax evaders who are considering using the Liechtenstein Disclosure Facility before it shuts at the end of 2015. This is similar to an amnesty for people with undisclosed assets, where they can reveal their existence without being charged under criminal law. As tax havens are coming under increasing scrutiny, it may be some people’s best option. HMRC will receive tax information from the Isle of Man, Guernsey and Jersey from next year. This sharing of tax data becomes an international affair from 2017, involving 94 countries.
By making their commitment to tackling tax avoidance and evasion such a high profile priority and the substantial financial investment in the Budget, it would seem that the government will be looking for multiple returns from HMRC in the form of successful prosecutions and that extra £7.2 billion.
