HMRC sees 80% leap in anti-avoidance tax take

HM Revenue & Customs boosted revenue from its counter-avoidance directorate by 80% last year, according to figures compiled by law firm Pinsent Masons.

HMRC sees 80% leap in anti-avoidance tax take

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The £886m (€1.02bn, $1.08bn) of income tax raised in the year to 31 March 2016 was up from £494m in 2014.   

The specialist directorate was set up in April 2014 to clamp down on the promotion and use of tax avoidance schemes.

Pinsent Masons director Paul Noble, a former tax inspector, said its success on this front meant that it was likely that the Treasury would continue to pour resources into the unit.

“HMRC has had a number of high profile successes when combating tax avoidance, and the government will be looking to build on this,” he said.

“After criticism for the backlog of unresolved cases, HMRC has sought to sharpen its approach with new powers that it can use to persuade people to exit tax schemes before they reach litigation.

“HMRC wants to demonstrate that no one is out of its reach. It therefore makes sense for anyone who suspects a scheme they are involved in to weigh up their options for either exiting or litigating and, in doing so, to take independent professional advice,” he said.

Successful validation

Noble said that HMRC would view the latest figures as a “successful validation” of its approach, but warned of the importance of its using its extended powers “in a proportionate manner”.

“HMRC has been awarded some fairly far-reaching powers to tackle tax avoidance over recent years, including accelerated payment notices (APNs) which require the payment of sums of money prior to any appeal even being decided,” he said. “HMRC needs to ensure it exercises caution when making use of these new powers, and that it does not ‘overstep the mark’.

HMRC has issued around 60,000 APNs under the new rules, worth an estimated £3bn, as of September last year.

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