The UK tax man is cracking down on serial tax avoiders with a raft of new penalties.
HM Revenue & Customs (HMRC) has declared war on tax avoidance schemes with the proposals in a consultation document published today.
‘Strengthening Sanctions for Tax Avoidance’ lays out the detail of HMRC plans.
The tax man claims some taxpayers put their cash into several avoidance schemes at the same time and even move their money between schemes throughout the year to try and outwit inquiries.
HMRC can already impose payment penalties on serial tax avoiders, but the latest proposals ups the ante for taxpayers by giving extra powers.
A key part of the new campaign is the serial avoiders unit, a new HMRC investigation team dedicated to stopping tax evasion.
Hard core tax avoiders
Serial tax avoiders will also have to pay their tax upfront if they try to benefit from an avoidance scheme and challenge HMRC to show they are obeying the rules.
HMRC will also scrutinise all their financial affairs more closely and will have the power to order extra fines and take criminal prosecutions out against tax cheats.
Financial Secretary to the Treasury David Gauke said: “HMRC already has the power to demand tax avoiders pay their tax in advance. Demands for more than £1 billion have already been sent out to people who use these schemes.
“A small hard core of taxpayers are still trying to avoid paying what is due, and the message to them is stop and pay up or we will come down hard on you.”
The government has taken a strong stance against tax avoidance over the past four years, including investing £900 million in HMRC to recruit and train more investigators.
HMRC has also invested some of that cash in sophisticated software that profiles and identifies tax avoiders.
Stronger penalties
Jennie Granger, HMRC’s director general of enforcement and compliance, said: “We are ready to make sure that this small but determined group who refuse to pay their taxes are brought to book.
“We are putting more resources into this and we also want to work with anyone who comes forward to put their past tax affairs in order.”
Granger also explained that the taxpayer is responsible for avoiding the tax and the serial avoiders unit will be tracking them down, not their financial advisers or scheme providers.
“Taxpayers are personally responsible for what they do with their money and the information they include in their tax returns,” she said.
