Chancellor expands crackdown on those who side-step their tax obligations by grouping 'planning' and 'imbalances' to 'evasion' and 'avoidance' – what happens next? Over the life of the last parliament we saw an ever-increasing drift of public perception towards the financial and moral desire to clamp down on those who seek to side-step their tax obligations. The line between tax evasion and tax avoidance has become increasingly blurred and in his Budget speech, the Chancellor introduced two new terms – 'planning' and 'imbalances in the tax system'.
Whatever those terms might mean in terms of tax mitigation, the UK government is intent on playing a leading part in eliminating worldwide tax and financial crime. The Summer Finance Bill will now introduce legislation to ensure that financial intermediaries are compelled to notify all customers and clients of the implications of the introduction of the Common Reporting Standard, under which details of investments and financial transactions will be shared between those jurisdictions who sign up to the new international transparency standards.
The clock is ticking
Time is running out for those with tax issues to regularise their affairs with HMRC. With the Liechtenstein Disclosure Facility due to close at the end of the year, the replacement facility will not guarantee such favourable terms for those who fail to come forward. On top of a £300m investment in tackling non-compliance generally, the Chancellor has earmarked a further £60m by 2020/21 to allow HMRC to 'step up' the already growing number of criminal investigations for tax fraud.
The expectation is that criminal cases will raise £600m over the next five years. The emphasis on more criminal cases is very much expected given the recent criticisms aimed at HMRC by the Public Accounts Committee. It remains to be seen however whether the 'threat' of criminal prosecution will result in more tax cheats coming forward and thus increase the flow of previously unpaid taxes into the Treasury’s coffers.
What is certain however is that those with tax issues should not delay in coming forward by speaking to one of our tax investigation specialists at RSM.