HMRC crackdown raises £21bn as companies feel the pressure

 
Kasmira Jefford
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HMRC’s total yield from investigations into tax avoidance and evasion jumped by a third to £21bn in the year to March – the highest level on record, according to research published today by UHY Hacker Young.

That compared with just £16bn the previous year, while in 2004-5 – the first tax year handled by the post-merger HMRC – the figure was a mere £6.9bn.

The accountancy group said the leap in compliance yield was a sign of HMRC’s “increasingly aggressive approach” aimed at increasing tax revenues from every possible source.

“This is the approach HMRC must take if it is to meet the very ambitious compliance yield targets set by the chancellor,” Roy Maugham, a tax partner at UHY Hacker Young, explained.

In April, the Treasury ordered the organisation to bring in £7bn in extra revenue by 2014-15.

“The government has put HMRC under pressure to deliver, and they in turn have put businesses and individuals under pressure,” Maugham added.

HMRC has so far targeted over 30 groups across specific business sectors and geographies including London lawyers, online traders and the construction industry. It aims for these task forces to bring in over £150m in extra receipts.

But while HMRC’s hard line approach is paying off financially, UHY Hacker Young warned its highly publicised task forces could have negative repercussions for businesses.

“There is a real danger that these tax inspectors, who swamp a sector, will be forced to keep digging until they find something – anything – to justify the noise HMRC has made about its task forces,” Maughan added.