20 September 2010
Titles that covered this article include the Times, 17 September 2010, the Financial Times, 17 September 2010, the Evening Standard, 17 September 2010, the Daily Mail, 17 September 2010.
- 8.6% of all tax now uncollected
- HMRC will come under pressure to close the gap
HM Revenue & Customs (HMRC) has upped its estimate of the amount of tax that taxpayers avoid paying it, says Clive Gawthorpe partner in our Manchester office*.
Clive says that the 11% rise in uncollected tax, from £38 billion to £42 billion over the last year, will lead to HMRC taking an even tougher stance on tax investigations. HMRC estimates that 8.6% of tax is now uncollected, compared to 7.8% in the previous year.
The amount of uncollected Corporation Tax has jumped by 19% over the last two years, from £5.8 billion to £6.9 billion. HMRC estimates that 13.9% of Corporation Tax is now uncollected compared to 11.5% in 2006/07.
Clive comments:
“This is a huge increase in the tax gap at a time when the Treasury can least afford it. HMRC is already under immense pressure to bring in more tax. These figures will simply add to its woes.”
“HMRC now has a huge compliance burden on its hands. It recently indicated that it would contest fewer tax disputes in the courts, but whatever approach it adopts, it desperately needs to reduce the amount of evasion and avoidance.”
“The concern now is that HMRC will ramp up its compliance activity. This could mean more tax enquiries. Inevitably innocent taxpayers will get caught up as collateral damage.”
“Despite a raft of anti-avoidance measures during the last 13 years aimed at reducing corporation tax avoidance, HMRC appears to be losing the battle. With the recession having dented corporate profits, companies are looking for ever-more ingenious ways to reduce their tax liabilities.”
“You can’t help thinking that the labyrinthine complexity of the UK tax system, far from reducing non-compliance, has actually fuelled avoidance and evasion as well as genuine errors. This is something that the coalition needs to look at as a matter of urgency.”
* http://www.hmrc.gov.uk/stats/measuring-tax-gaps-2010.htm.pdf
We produce a range of informative publications focusing on the latest accounting issues. Click to add yourself to our mailing list.
Up to £15 million will be clawed back from academy schools before the end of the current academic year due to government budgeting errors, according to our data.
A quarter of all taxpayers may be paying the wrong amount of tax due to incorrect PAYE codes according to our analysis.
The cost of listing on AIM has risen at its fastest rate in more than five years according to our findings.
A sudden surge in M&A activity on AIM is being driven by private equity backed deals to take companies private, our research reveals.
From 6 April 2012 HMRC will be able to ask employers to pay a financial security where it thinks there is serious risk that the business won’t pay over their PAYE tax deductions or National Insurance contributions (NICs) on time.
The value of loans to businesses in the UK has slumped by 13% since the collapse of Lehman Brothers, the second fastest fall among the G8, according to our findings.
Our international network, UHY, welcomes new member firm in Tunisia, CNBA.
Hot on the heels of an announcement from HMRC that the closure date for the Liechtenstein Disclosure Facility (LDF) has been extended to 5 April 2016 has come speculation that the local banks are pushing for much higher transfers of funds into Liechtenstein and a minimum period for which any account must be kept open.
