The government has pledged to collect an extra £5 billion per year in underpaid tax. This means that the focus of HMRC tax investigations will become ever wider. Rather than concentrating on high net worth individuals, anybody from taxi drivers to tradespeople to professionals such as doctors and dentists are now coming under HMRC scrutiny.
HMRC has invested heavily in technology to help identify targets for investigation. Its £45 million database “Connect”, first launched in 2010, gathers real time data from multiple public and private sources, including banks, local councils, legal aid data and even social media. This helps HMRC identify where tax avoidance may be an issue.
Amongst a number of measures expected to be introduced over the next term of parliament is the government’s signing of an automatic information exchange agreement co-ordinated by OECD, which will allow HMRC access to an unprecedented level of details on individuals’ overseas savings and investments from 2017.
Signatories include Switzerland, Jersey and the Cayman Islands. The Revenue will be able to compare data received from abroad with its own records and can then investigate discrepancies or any other reason for suspicion.
You can protect yourself against the not inconsiderable costs that can be incurred in a tax investigation by subscribing to our tax investigation service. To find out more call Carrie Campbell on 0131 226 2233.
Remember these costs apply even if you have paid the correct tax to the penny!