Cash from tax investigations up £2bn

HMRC has beaten its “massively ambitious” target for tax investigation work by £2bn in the last year, bringing the total revenue raised through compliance work to a new all time high.

According to data revealed by UHY Hacker Young, a record £20.7bn in additional revenue was collected by HMRC through compliance work focused on tax avoidance and evasion in 2012/13 - up 11%.

The extra revenue from HMRC investigations came from both small businesses and individuals: Small businesses jumped 30% in the year to 31 March, to £565m, while the share clawed back from investigations into personal tax returns rose by 38% to £609m.

Roy Maugham, a tax partner at UHY, questioned whether...

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Comments

How much of it is real money?

the_Poacher | | Permalink

How much of this is real cash collected rather than say adjustments to losses in failing businesses and then wild assumptions as to how much of it would have been used? How much of it is redefining what they count? How much of it is catching traders pocketing cash etc and how much is quibbling over expenses, stock and timing issues?

stepurhan's picture

Data revealed?    4 thanks

stepurhan | | Permalink

Why is UHY Hacker Young getting free publicity for this story?

According to the opening paragraph, The City AM and The Times both published this story first. The "revelation" fails to provide links to either of these reports, or the data they then go on to say they have analysed. Is this not simply a case of a firm picking up a finance news story, writing a puff piece full of fairly bland and obvious "analysis" and then hawking it around accountancy news sites? I expect better of AccountingWeb.

Time for change's picture

Isn't it a great pity

Time for change | | Permalink

An HMRC spokesperson responded that since 2010 the government had invested nearly £1bn in HMRC to catch out tax cheats and that now it was delivering outstanding results.

that "outstanding results" aren't reached in the basics, such as customer (taxpayer) service or basic communication skills.

 

Ministry of misinformation    2 thanks

mikefleming3028 | | Permalink

HMRC has beaten its “massively ambitious” target for tax investigation work by £2bn in the last year, bringing the total revenue raised through compliance work to a new all time high

There are lies, damn lies and HMRC statistics. Oops just seen Father Christmas and a flying pig out of the window of my office. 

johnjenkins's picture

Much better to calculate

johnjenkins | | Permalink

just how much HMRC got in hard cash. How much of the overtstated stuff is penalties never to be got etc.etc.

On HMRC web site today Mr

mikefleming3028 | | Permalink

On HMRC web site today Mr Gauke announces

"HM Revenue and Customs grants to voluntary and community sector organisations that help people with taxes, benefits and tax credits led to additional tax of £30.6 million being declared last year.

During 2012-13, HM Revenue and Customs (HMRC) made £2 million available to voluntary and community sector (VCS) bodies to provide help and advice to customers who need support to meet their obligations and claim entitlements. 

More than 3,500 volunteers were trained by the organisations to answer people’s questions on tax credits, benefits and tax issues. As a result, HMRC customers also took up an additional £29.9 million of credits and benefits"

Who trained these "volunteers" to provide help and advice ie free labour and from their declared results  it looks like their default position was to either deny claims or increase liability. I make this comment because the press release make no mention of any of  HMRC customers being better of as a result of availing themselves of this wonderful  free facility. 

No doubt this £30million will be included in HMRC £2bn figure above. Does this not strike anyone else as a little perverse

Collective keeping down of heads    1 thanks

mikefleming3028 | | Permalink

undefined

HM Revenue and Customs (HMRC) has responded to today’s Public Accounts Committee (PAC) report on its Annual Report & Accounts 2012-13.

“HMRC strongly disputes the conclusions in the Public Accounts Committee report and challenges the Committee’s selective and misleading use of figures.

 

Obviously The Public Accounts Committee don't believe HMRC figures either but its noticeable that HMRC press release is issued direct from HMRC press office and not one of the Board of Directors has had the courage to put their name to it. In any other business the entire Board of Directors would be considering their collective position. Not so in this instance it would seem, perhaps time will prove me wrong?   

mr. mischief's picture

The Committee are right!    1 thanks

mr. mischief | | Permalink

Here is just one example, I could give many:

I am in the North West.  A client is in year 2 of the NI contributions holiday in 12-13.  I submitted my one-page schedule which is miles better than the ridiculous HMRC 10 pager, and which they accepted for this client in 11-12 and in fact have accepted a total of 7 other times.

This time some idiot in Benton Park rejects it as not in their format, even though the amount - just over £3.5k - ties in EXACTLY with the P35 and every NI number, start date and so on of the employees concerned is on there.

OK, it's a Jobsworth I say.  Fill in the silly stuff they have asked you to.  This I duly did on 27 June.  They STILL have not processed this or even replied to the letter.

I have called AAM twice and sent them copies of everything.  So HMRC now have had the original data three times and yet this client is still in Debt Management.  Now let me say right away that Carol of AAM has been great, in my view Benton Park are wilfully ignoring the information I have sent them for whatever stupid reason.

This client is a new, successful restaurant employing 10 to 15 staff depending on the time of the year.  New jobs for the UK economy from 2011.

The idea that they would treat Vodafone, Goldman Sachs or Google like this is utterly laughable.

HMRC Compliance Checks

Moo | | Permalink

I currently have 'live' paperwork on my desk relating to 5 compliance checks and that has been pretty normal through the last 12 months.  We are a small tax team but deal with over 1,000 personal tax returns each year, most of them very straightforward, when a client forgets a bank account or payout from a life assurance policy I think it is a good thing that the tax man pulls them up over it. I can't complain either when we make an error and enter private pension premiums as retirement annuity.  My perception is that over the last couple of years the taxman has significantly upped his game and is picking up many errors that would have gone unnoticed 4-5 years ago.

The other two cases are more problematic and time consuming and relate to people who have been working overseas but who have not qualified as UK non resident.  HMRC appear to be focussing on this area at the moment as it is potentially pretty lucrative.  I'm not talking about the HNW individual with a pad in Monaco or even the contractors lured into using dodgy offshore 'solutions' involving non repayable loans.  My guys are just contractors who move around between engagements in UK, Scandinavia, Far East etc and often don't understand why they should be paying tax in two countries on the same income or why it makes a difference which twelve months you work overseas for.  These cases can be decent earners for the tax man and we are starting to refer them to a specialist firm dealing with Expats as they can be such hard work to sort out.  A warning to other practitioners with clients in this category, the tax man may be shining his headlights on your client next - and a Merry Christmas to us all.  

not what I'd call it

The Black Knight | | Permalink

"HMRC has beaten its “massively ambitious” target"

AMBITIOUS?

How could they fail it must be like shooting fish in a barrel.

It's a start on the £85 billion missing I suppose though.

When are we going to see the promised prosecutions?

robertlovell's picture

Further comment from HMRC

robertlovell | | Permalink

“We have secured more than £50 billion of additional tax from our compliance work since 2010, including £23 billion from large businesses. We have carried out 2,345 prosecutions for tax evasion in the last three years, including of high-profile accountants and lawyers, have halved the number of disclosed tax avoidance schemes and have protected more than £2.4 billion from marketed tax avoidance schemes this year alone.

“As a result of HMRC’s sustained efforts, the tax gap – the proportion of taxes that are due which are not collected – has fallen from 8.3 per cent in 2005/06 to seven per cent in 2011/12. If the tax gap had remained at the level it was at seven years ago, we would be collecting £7 billion less each year.”

Thanks Robert

The Black Knight | | Permalink

robertlovell wrote:

“We have secured more than £50 billion of additional tax from our compliance work since 2010, including £23 billion from large businesses. We have carried out 2,345 prosecutions for tax evasion in the last three years, including of high-profile accountants and lawyers, have halved the number of disclosed tax avoidance schemes and have protected more than £2.4 billion from marketed tax avoidance schemes this year alone.

“As a result of HMRC’s sustained efforts, the tax gap – the proportion of taxes that are due which are not collected – has fallen from 8.3 per cent in 2005/06 to seven per cent in 2011/12. If the tax gap had remained at the level it was at seven years ago, we would be collecting £7 billion less each year.”

That's a little clearer, Still just a start.

You would think you would hear about these prosecutions.

My impression on the front line is that most still get away with it.

What a return on investment for HMRC! Imagine what would be the result if they invested more in tax evasion.

There has to be a reason why the government don't want to reduce the tax gap to quickly.