HMRC is set to increase its investigations into tax avoidance and contractors not operating via an umbrella company may wish to get advice from a specialist accountant to ensure that all their tax matters are in order.
The Revenue has vowed to seize an additional £4 billion from investigations and according to UHY Hacker Young this more aggressive stance will result in HMRC collecting £16.1 billion during the course of this financial year. However, in order to achieve this, the Revenue may resort to investigating marginal cases and this in turn could lead to innocent businesses and limited company contractors being trapped in the net.
There’s no doubt that the budget deficit does need to be reduced but raising £4 billion more tax is an enormous increase, said one of the partners from UHY Hacker Young. The Revenue will need to come down hard on illegal tax evasion and legal tax avoidance in order to meet this target.
HMRC has already set up teams to investigate Capital Gains Tax evasion and these investigations raked in £73.6 million in the last financial year as opposed to £59.7 million in the financial year 2007/8. Considering the recession affected asset values, this gain is quite remarkable and shows just how determined the Revenue is when it comes to taking an aggressive stance on tax evaders.
Earlier this month, the Revenue also obtained a confiscation order for £92.3 million after two members of a VAT fraud gang were sentenced to seven years in a missing trader property and car fraud. Items were purchased and then sold on at a cheaper price but with added VAT. The goods were sold on various times through a chain of companies until they were eventually exported back to the EU, at which time the exporter claimed a VAT credit from HMRC.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.
Image: Stonegate walk – honesty jar by hapticflapjack
