HMRC’s investigations into tax avoidance and evasion have raised yields by a third to £21bn in 2011-12.
According to chartered accountants UHY Hacker Young, the treasury’s approach is aggressive, with only short-term dividends.
Expecting the taxman to ‘further ratchet up’ its tax investigations over the next year after orders from the treasury to bring in an extra £7 billion in revenue by 2014/15, Roy Maugham, tax partner at UHY Hacker Young, commented: ‘HMRC’s approach to compliance is becoming more hard-line with each passing year… this is the approach HMRC must take if it is to meet the very ambitious compliance yield targets set by the Chancellor.’
He warns, however that the widely publicised tax task forces might have a negative impact on businesses, as investigators are put under pressure ‘to find something – anything – to justify the noise HMRC has made about its task forces’, putting pressure on tax compliant businesses.