By Lynne Gowers on 2nd February 2015

Determined tax avoiders challenged by HMRC’s new sanctions

While HM Revenue & Customs (HMRC) was braced for a last-minute surge in contractors filling in their self-assessment tax returns before Saturday’s midnight deadline (January 31st), the body also revealed plans to further tackle tax avoiders.

A day before the deadline on January 30th, HMRC published a new paper titled Strengthening Sanctions for Tax Avoidance.

The paper further delves into HMRC’s current penalties for tax avoiders, setting out even more proposals to challenge those who try to avoid tax on a regular basis. It comes following last week’s report that the crackdown on the country’s top earners had brought in an extra 60 per cent tax to HMRC.

David Gurke, the financial secretary to the treasury, highlight the measures that had already be taken in a bid to stop tax evasion: The government introduced the Accelerated Payments regime last year to fundamentally reduce the incentive to engage in tax avoidance.

HMRC has already issued notices worth over £1 billion, requiring avoidance scheme users to pay their tax upfront, like the vast majority of taxpayers.…

At present there are penalties which tax avoiders face, however the new proposals aim to focus on those who use various avoidance schemes at any one time in a bid to evade paying significant amount of tax.

HMRC suggested that serial avoiders may use the same scheme within one year or use a number of different ones.

Mr Gurke spoke about the new paper saying that they are proposing further action, such as penalties, to tackle the small hard-core group of people who repeatedly use avoidance schemes….

Our message is clear: it is time to get out of avoidance and start paying your fair share,… he added.

In addition to the new plan, HMRC has created the new Serial Avoiders Unit (SAU) to further identify those who use various avoidance schemes. This will include a hotline for people who have fallen within this bracket yet want to sort out their tax affairs.

Written by Lynne Gowers
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