The government has launched a new drive to target wealthy tax cheats, including accountants, who own property overseas.
HMRC recently confirmed that it has formed a new team of 200 investigators to unearth areas where wealthy individuals may be indulging in tax evasion or avoidance.
David Gauke, the exchequer secretary to the Treasury, said the coalition has promised to tackle tax avoidance and evasion across all sections of the economy. In the last Spending Review, we allocated £917 million so that the Revenue can reduce the tax gap before the end of the current parliament.
HMRC now has increased capability and better expertise and its methods for tackling tax evasion at home and overseas have proved successful. This government wants to give out a clear message that there is no place for tax cheats to hide, he concluded.
Meanwhile, large companies have seen the percentage of tax they pay on their profits drop by 33% over the last two years, according to research from UHY Hacker Young.
FTSE-100 companies now pay an effective tax rate of 26%, compared with the 35.8% they paid two years ago. Part of this decrease can be attributed to the reduction in the rate of corporation tax, but also because some organisations have moved their headquarters overseas.
UHY Hacker Young’s senior tax partner, Roy Maugham, explained that companies are structuring their business so that they take advantage of the best rate of tax. They are not doing anything illegal, nor are they stretching the boundaries of conventional tax planning, but they have an obligation to their shareholders to control the amount of tax they pay.