HMRC collecting record revenue from personal tax investigations

The taxman collected a record amount of revenue last year from investigations into personal tax due to a renewed focus on ordinary taxpayers and a more ‘heavy handed’ approach.

A freedom of information request by the Daily Telegraph revealed that revenue collected from self-assessment investigations in the 2013-14 tax year was up 39% to £845m compared to figures from 2012-13.

HM Revenue and Customs choose a number of cases each year to investigate, with taxpayers being required to provide evidence to support the information in their Self Assessment submissions.

Mark Giddens at UHY Hacker Young said that HMRC were adopting a more ‘heavy handed’ approach in order to catch the average taxpayer.  He added;

“HMRC has become more thorough and more ruthless as it looks to maximise tax take without increasing its costs.  That’s bringing more and more ‘average’ taxpayers into its sights.”

An example of the taxman’s tougher stance is the fact that the number of prosecutions due to tax evasion investigations have also increased dramatically from 165 in 2010-11 to 1,165 in 2013.

He also warned small business owners and people with second incomes who may have previously thought of themselves as being ‘under the radar’ to make sure their tax affairs were completely compliant, because in his experience, HMRC were being ‘very unforgiving’ when it came to even simple errors.

Those that have been targeted in recent HMRC investigation campaigns include taxpayers with multiple sources of income, those who work second jobs part time, consultants, internet and car boot traders.

As well as targeting certain professions, the taxman has also been putting more resources into targeting those they believe are living beyond their means and not paying enough tax.

Mr Giddens believes that areas such as the South-East are being increasingly scrutinised saying;

“HMRC are keeping a closer eye on taxpayers at a local level and will investigate specific sectors where it believes tax evasion is a problem.”

However, a spokesperson for HMRC denied that they had specific targets in mind.  He said;

“Over 90% of UK taxpayers play by the rules and rightly expect us to crack down on the minority who don’t’.  We use formal tax enquiries to make sure individuals, businesses and large corporations follow the rules and identify those who need some help to get it right.  This is about following the facts and evidence not about targeting.”


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