Latest Public Sector News

04.12.12

£77m funding for HMRC tax crackdown

HMRC will receive £77m extra funding to track down companies and individuals who pay too little tax in the UK, the Treasury has announced.

The statement comes after the Commons Public Accounts Committee (PAC) attacked the HMRC for failing to collect enough corporation tax from global companies including Starbucks, Amazon and Google.

The funding will be used to expand HMRC’s anti-avoidance and evasion activity, including offshore evasion and new information disclosure rules and sanctions for those who sell such schemes will be introduced.

The HMRC expects to recoup £22bn a year through the new measures.

Margaret Hodge, PAC chair, said: “The evidence we took from large corporations was unconvincing and, in some cases, evasive. HMRC also lacked clarity when trying to explain its approach to enforcing the corporation tax regime.

“The inescapable conclusion is that multinationals are using structures and exploiting current tax legislation to move offshore profits that are clearly generated from economic activity in the UK. HMRC should be challenging this but its response so far to these big businesses and their aggressive tax planning has lacked determination and looks way too lenient.

“We consider that paying an appropriate amount of tax in the country in which profits are made is not only a matter of basic economics. It is also a matter of morality.”

Chancellor George Osborne said: “The Government is clear that while most taxpayers are doing their bit to help us balance the books, it is unacceptable for a minority to avoid paying their fair share, sometimes by breaking the law.

“We are determined to tackle this problem and HMRC are making good progress, but we are giving them additional tools to bring in more. 

“The action we are announcing today will help HMRC close in not only on those who seek to avoid or evade tax, but on the dubious ‘cowboy’ advisers who sell them the schemes and dodges they use to cheat the law-abiding majority.”

An HMRC spokesman said: “We relentlessly challenge those that persist in avoiding tax and have recovered £29bn additional revenues from large businesses in the last six years, including £4.1bn in the last four years from transfer pricing enquiries alone.”

Tell us what you think – have your say below, or email us directly at opinion@publicsectorexecutive.com

Comments

Gerry Dominey   05/12/2012 at 13:19

One commentator described this as hiring more police to prevent people doing 70mph on motorways: it won't work because the people involved are doing nothing illegal. These new staff will bring in more tax because tax officers always yield more in (otherwise avoided) tax than they cost to employ. That's why they should never have been cut in the first place. However, moving offshore will not be tackled by these measures. That would require new legislation and there is no intention to introduce any.

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