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Austerity and funding from the Government has led to increased pressure on HMRC to bring in more revenue by clamping down on tax avoidance and evasion. However, what I find quite worrying for business owners is HMRC’s harsh and cut-throat response to this increased pressure. My thoughts were also reiterated by the House of Lords, who published a report towards the end of 2018, which criticised HMRC’s powers and most importantly questioned their ability ‘to ensure that taxpayers are treated fairly’.
The beast that is now HMRC is the most aggressive and powerful I’ve faced in my time. It’s one of the only authorities with prosecution targets and they are taking this very seriously. They’ve been given funding by the Government, and the Government is expecting a significant return on this – HMRC are fully aware of that.
It’s also quite obvious that HMRC are losing interest in differentiating between ‘sophisticated’ and ‘unsophisticated’ taxpayers; meaning that they’re not concerned with the intent and whether it was purposeful tax avoidance. Their only concern is to recover lost revenue.
The reality is that with this new approach by HMRC, if you’re going to challenge them alone you’re unlikely to be successful.
The right of appeal is going to be harder, as HMRC are doing everything they can to restrict this right and even when individuals and businesses make it to the point when their appeal is being considered, you have to be prepared for a long drawn-out battle, where success rates are still quite low.
My advice would be, that if you feel you’ve been wrongly approached by HMRC, make sure you get in contact with a tax and dispute resolutions team who have a proven record of settling complex cases and helping clients avoid criminal investigations and the confiscation of assets.
My comments on this topic were first published here in International Adviser:
Challenging HMRC 'Discovery' Assessments
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Mark Taylor
Serious civil tax investigations services
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HMRC Penalty Mitigation
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11 February 2019
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