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Recent publicity regarding the non or minimal payment of corporation tax has shone the spotlight on the importance of HM Revenue & Customs being more effective in maximising the collection of tax. There are probably few who regard us as having a soft tax regime, but it is evident there are those that escape paying what some regard as their moral obligation. While time will tell what changes there may be in the taxation of profits of companies such as Amazon, Google, Starbucks and others, the announcements in today's Autumn Statement demonstrate there still remains tax that HM Revenue & Customs should be collecting.
The fact is that the overwhelming majority of people pay the right tax. HM Revenue & Customs makes it clear that ‘closing in on tax evasion' is not about these people. It seeks to assure all honest taxpayers that they are determined to tackle those who break the law by not paying the tax they owe or who try to mislead and attempt to evade their taxes. It is hoped that the publicity at the beginning of this month will focus their attention on the tax payments of some of those global companies who are doing business here in the UK. In order to provide the tax authorities with the necessary funds the Government is investing a further £77 million into avoidance and evasion work.
A £14 billion loss to the Exchequer?
HM Revenue & Customs believes that 93 per cent of tax due is paid. The latest estimates suggest that those operating in the ‘hidden economy' and those who undertake organised criminal attacks on the tax system, deprive the public purse of around £14 billion - 46 per cent of all unpaid taxes.
As a result of the focus of resources in 2011/12 HM Revenue & Customs reported that they had increased compliance revenue by £2 billion and they expect their compliance activities will raise £22 billion a year by 2014/15.
Actions HM Revenue & Customs has already taken:
- Signed an agreement with Switzerland to recover billions of pounds in previously uncollected tax
- Created an Offshore Coordination Unit, dedicating an additional 100 investigators to tackle tax evasion
- Established a team dealing with the tax affairs of about 5,000 of the wealthiest individuals that has, since 2009, raised an additional £500 million in tax.
HM Revenue & Customs has announced that during the coming four months they will launch a series of more than ten different initiatives - many trust they will also ensure that foreign owned companies contribute corporation tax to the Exchequer!