HMRC's Tsunami of New Powers

The FT reports that the UK is preparing to triple the number of prosecutions of “serious and complex” tax evaders using a "tsunami" (a quote made by a nameless tax official) of proposed new powers.

An HMRC unit, combining civil and criminal investigations teams, will spearhead a crackdown that George Osborne claims will increase tax revenue by £7.2BN.

However, as with all hyped promises of greater tax revenues, it is likely HMRC will end up going for easy to pick low hanging fruit rather than those with top notch lawyers and tax advisers.

Even the Office for Budget Responsibility has raised doubts about the extent to which the planned new tax measures will help the chancellor close the deficit.

The proposals include introducing “strict liability” in tax cases. This would mean that claiming evasion had been accidental would be no defence unless there was a “reasonable excuse”. A second is for a charge that could be brought against companies, rather than individual executives or directors, that evade tax, as well as the agents that help them.

It is noteworthy that HMRC are loudly reminding everyone that the Liechtenstein Disclosure Facility is to close at the end of this year. This indicates that HMRC may not be as confident as it claims about being able to hit high targets with its new powers.

Tax does have to be taxing.

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