Written by: Keith Tully
Reviewed: Monday 13th July, 2015
HMRC has been promised an extra £800 million in government funding over the next five years to support its efforts aimed at clamping down on tax evasion and non-compliance.
Chancellor George Osborne made an announcement to that effect in his recent Budget speech, in which he explained that the added funding is part of a broader plan to significantly increase the amounts of money being collected by HMRC on behalf of the Treasury.
Efforts to pursue serious and complex tax-evading criminals are part of the plan and will receive £60 million in additional funding.
But much of the focus will be on the activities of small and mid-sized companies, public bodies and “affluent” but not “wealthy” individuals, with scrutiny in these contexts to be supported by an extra £300 million in funding.
In his Budget speech at Westminster, Osborne said that HMRC will also expand on its existing policy of naming and shaming tax offenders to include those who have repeatedly used failed tax avoidance schemes.
“These people should have nowhere to hide,” he told MPs in the House of Commons.
Hopes are that HMRC’s clampdown on small and medium-sized companies and organisations will generate close to £2 billion in extra revenues for the Treasury over the course of the current parliament.
“We’re boosting HMRC’s capacity with three quarters of a billion pounds of investment to go after tax fraud, offshore trusts and the businesses of the hidden economy, tripling the number of wealthy evaders they pursue for prosecution,” he said.
The chancellor also said he intends to change the law in order to “stop the use of losses which abuse our controlled foreign companies regime” and to ensure that “investment fund managers pay the full capital gains tax rated on their carried interest”.
Elsewhere, companies which generate more than £20 million in profits each year will soon be obliged to pay their taxes closer to the point at which those profits were generated.
“This is fair, it’s more in line with what we’re doing in personal tax and is what almost all other G7 nations do,” Osborne said.