HMRC likes where things are headed but wants more

Industry news roundup: week ended 5 Dec 2013:

It’s never enough for Her Majesty’s Revenue and Customs when it comes to its campaign to snuff out tax avoidance, even in the face of successful feedback.

Right now, the taxman’s new hard line that it’s taken on tax avoidance has been paying off, if recent research findings from Pinsent Masons can be believed. HMRC has seen a decline in the number of tax avoidance schemes disclosed to it by a rate of 35 per cent over the past two years. Considering that the number of disclosures hit a new low of 77 during the 2012-2013 year – a far cry from the massive 587 disclosures during the 2004-2005 season that ushered in the new tax avoidance early warning system – it does seem like things are working out in the tax authority’s favour.

So good on the taxman for actually making a difference. Well, I’m not going to say how much money this has actually brought in to the Treasury’s coffers versus how much money it cost to go after these tax avoidance schemes, but that’s neither here nor there – the point is that HMRC should be celebrating its victories. Instead it’s just complaining that it hasn’t done more and has continued to push towards other ways to squeeze as many pennies from Brits as possible.

In fact, now HMRC says it wants to strengthen and expand its efforts to wipe out disguised employment through its IR35 rule. Now stop me if you’re not following here, but you might have already heard how IR35 enforcement is absolutely bollixed up right now, considering how the current guidance doesn’t match the legislation in any way, shape or form. In fact, the latest guidance did nothing but muddy the waters and turn people who were currently in no danger whatsoever of being at high risk for IR35 to suddenly be incredibly high risk – despite the fact that the laws didn’t actually change at all. But HMRC wants to actually expand this instead of fixing the problem.

Why? Damned if I know. Apparently there’s still a few pennies out there that haven’t been accounted for. Whatever the reason for the taxman’s wild grasping, mark my words this isn’t going to end well.

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