HMRC Sees 27% Jump in Tax Collected via Investigations
The amounts of money collected by HMRC following investigations into individual taxpayers increased by 27 per cent during the most recent tax year.
According to the latest data, some £13 billion worth of tax collections were recorded in response to investigations during the year 2017/18.
That figure represents a £2.7 billion jump compared to the number for the previous year, when a total of £10.3 billion is understood to have been taken in response to investigations.
At least part of the increase reported during the most recent full-year period is being attributed by experts to the ‘loan charge’ policy, which came into effect as of April 6th this year.
Those charges are now being collected by HMRC based on rules designed to crack down on what are deemed to be ‘disguised remuneration’ schemes.
The loan charge policy has been controversial since its introduction with many people being very heavily impacted in ways that they consider to be unfair and even “draconian”.
Some of the schemes being targeted by HMRC and its loan charge clampdown date back as far as 20 years, so for some people that means they’ve suddenly found themselves with very substantial tax bills to pay.
For some people affected, the consequences have been distress and bankruptcy, while thousands of people being impacted are understood to be on low incomes and engaged in work as nurses or social care workers.
But for HMRC, the loan charge policy has resulted in a significantly increased income in relation to its tax investigations.
Advancements in the technologies being used by HMRC to identify potential cases where investigations might be warranted are also being credited in part for the increase in tax money that was collected in this manner last year.
“Over the last couple of years, HMRC has used a huge variety of sophisticated measures to help boost cash collected from investigations,” explained Clive Gawthorpe, a partner at UHY Hacker Young in a statement.
“Technology is playing an increasingly important part in identifying cases and it integration into the compliance process is set to continue.”