By Jonathan London on 27th January 2015

Crackdown on tax avoidance brings in 60 per cent more money

A crackdown on tax avoidance and evasion within the country’s top earners has resulted in a 60 per cent gain in tax received by HM Revenue & Customs (HMRC), according to a new report.

The information attained by law firm Pinsent Masons, using data from HMRC, showed that the tax office’s Affluent Unit which focuses on residents who earn over £150,000 per year, or over £1 million in wealth, produced an extra £137.2 million in tax in 2014.

The Affluent Unit was set up in 2011 and has grown in size following the 2013 recruitment of an extra 100 tax inspectors. Working alongside HMRC’s High Net Worth team, it covers approximately 500,000 UK residents who are classed as being within the affluent remit.

It is believed that this 60 per cent increase in tax gain could only be the beginning as HMRC continues to investigate and probe those who may not have fully declared all their taxes. The implementation of the organisation’s Connect database has also meant that there really is little scope to be dishonest, as the £45-million piece of technology works by taking real time information to help identify those who may be more inclined to avoid declaring their tax.

James Bullock, head of litigation and compliance at Pinsent Masons, said: “This surge in extra revenue from Affluent Unit tax investigations serves as a reminder that HMRC is widening its lines of inquiry.…

“People who would just consider themselves moderately successful professionals and business people are now also coming under the scrutiny of HMRC’s specialist units,” he added.

This news comes following the scrutiny HMRC faced in 2014 after unveiling plans to be able to actually take outstanding tax from people’s bank accounts directly. While it has since been agreed that tax inspectors will instead meet with taxpayers face-to-face before taking any money, it is another sign that HMRC really is cracking down on anyone who isn’t fully disclosing their taxes.

With the self-assessment tax return deadline only days away, it has never been more important for contractors to be fully aware of their finances and how to submit their taxes as smoothly as possible.

Jonathan London Written by Jonathan London

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