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Tackling tax avoidance and evasion

As promised here is some further detail:

HMRC launched its new approach to closing in on tax evasion on Monday 3 December.  It reiterated its determination to stop people avoiding tax and to levy higher penalties for offenders.  Its action plan for the next few months is to:

  • Launch a radio advertising campaign warning people of the risks if they evade tax.
  • Send out letters challenging those with secret overseas bank accounts to explain their position.
  • Establish a new centre of excellence on offshore evasion.
  • Publish a measure to obtain data from merchant acquirers about businesses that receive credit and debit card payments to help identify businesses that do not declare their full sales.
  • Begin recovering previously unpaid UK tax on hidden wealth located in Switzerland by implementing the Swiss/UK Tax Cooperation Agreement.
  • Launch a new campaign on missing VAT returns.
  • Use the latest extract of Land Registry data to help HMRC identify people whose companies may try to evade paying the property tax they owe.
  • Use 2011-12 tax Self Assessment returns to identify potential evasion among affluent taxpayers.
  • Identify even more people whose income and wealth does not match with that declared to HMRC
  • Begin five further taskforces using Connect to target high risk groups. This will include projects on EU cross-border tax evasion and tax repayment fraud.
  • Add data from banks and financial institutions on financial transactions, where a risk has been identified, to provide another new way to spot those trying to hide their income and wealth in order to evade paying tax.
  • Start a campaign using new data to target those who have profited through owning and selling second homes or multiple properties in the UK or abroad and have not paid their tax liability.
  • Hold discussions with intermediaries such as tax agents on public concern on tax evasion, the behaviours and arrangements that may indicate evasion and how agents can help their clients to comply with the law.
  • Publish a comprehensive strategy to tackle offshore tax evasion in Spring 2013

Today five further measures have been announced with effect from today, 5 December 2012. These cover:

  1. Foreign bank levies - which are not allowable deductions for Income Tax or Corporation Tax purposes.
  2. Tax mismatch schemes - which reduce Corporation Tax liability through asymmetric tax treatment of loans or derivatives.
  3. Property return swaps - which convert capital losses into income losses.
  4. Manufactured payments - where schemes involve stock lending arrangements.
  5. Payments of patent royalties - relief for non trade payments to be abolished.



Date: 5th December, 2012
Author: David Mansell


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