It came as no surprise to us that the Chancellor announced further measures to tackle tax avoidance and tax evasion in his summer 2015 Budget. What was interesting was the emphasis placed upon the criminal investigation of complex tax fraud, which historically it has struggled to get to grips with on a large scale. The government will continue to clamp down on tax avoidance, planning and evasion, as well as increasing resources for HM Revenue and Customs (HMRC) so they can make sure people pay the tax that iss due. This includes:

  • Extra investment of £800 million between now and 2020 for HMRC’s work on evasion and non-compliance.
  • Tripling the number of criminal investigations HMRC can undertake into complex tax crime, concentrating on wealthy individuals and companies. The government has set a target of increasing the number of such prosecutions to 100 a year by 2020.
  • Allowing HMRC to access more data to identify businesses that aren’t declaring or paying tax. This includes the obtaining of data from online business intermediaries and electronic payment providers to identify the non-compliant.
  • Clamping down on the organised crime gangs behind the illicit trade in tobacco and alcohol.
  • Stopping investment fund managers from using tax loopholes to avoid paying the correct amount of Capital Gains Tax on their profits from the fund (this is known as carried interest).
  • Making sure international companies pay tax on profits diverted from the UK. Also, a further tightening upon the Controlled Foreign Companies rules.
  • A further attack on individuals using their own companies by tightening upon the IR35 legislation, alongside a tightening up on travel and subsistence expenses for employees of Umbrella Companies following consultation this year.
  • Introducing a ‘general anti-abuse rule’ penalty and tough new measures for serial avoiders, including publishing the names of people who repeatedly use failed tax avoidance schemes.

Our View

It is clear that the government continues to talk tough on tax avoidance and evasion, and is prepared to put its money where its mouth is. If you or your clients may be affected by any of the above, it is vital to seek expert professional opinion. We are happy to have a no obligation/no cost conversation regarding any regulatory issues that may affect you.