HM Revenue & Customs is working hard to fill an ever-increasing gap between what is due and what has been collected, its chief executive Lin Homer has warned.
Ms Homer said the use of real-time data is set to enhance the organisation’s enforcement capabilities in the crackdown on tax evasion.
According to recently released figures from the HMRC the tax gap for the year 2012-2013 was £34bn – 6.8 per cent of tax liabilities, compared to 6.6 per cent for the previous year. Illicit tobacco and unpaid VAT were the two main culprits.
Despite the fact that the long-term trend is downward – the tax gap was 8.5 per cent in 2005-2006 – tax advisers fear the HMRC will get tougher with taxpayers when it comes to imposing penalties for inaccuracies in their tax returns.
Ms Homer added that HMRC intends to “work more closely with agents and intermediaries to provide improved customer service”.
Adviser view
London-based David Prestwich, tax partner at accounting firm Mazars, said a more aggressive approach may mean penalties will rise, but he welcomed the HMRC’s move to the use of real-time information and improved communications.
Mr Prestwich added: “I wonder if the HMRC really appreciates just how much of the tax gap is down to inefficiencies rather than the behaviour of groups such as individuals or small- and medium-size enterprises.”
