Publication of HMRC’s annual report points to continued crackdown on tax avoidance.
HMRC has recently published its annual report and accounts for 2014-15. So what insights does this provide into the changes and developments tax payers can expect to encounter in their future dealings with HMRC?
The report claims a number of key achievements in 2014-15 and tells us that HMRC:
- Collected a record £517.7bn in tax in 2014-15 (an increase of £11.9bn on last year), as a result of economic growth and the continued crackdown on tax evasion and avoidance.
- Secured a record £26.6bn in additional compliance yield (£8bn more than in 2011-12) by continuing to crack down on those who cheat the tax system.
- Protected £9.79bn in tax through successful litigation.
- Prosecuted 1,289 cases, predominately for tax-related crimes — securing a collective total of 407 years in prison sentences.
- Achieved £210m in cost efficiencies, through continuing to reduce property, workforce, IT and procurement costs, bringing total savings over the past four years to £991m.
- Handled 72.5 per cent of 50 million customer calls (down from 79 per cent in 2013-14) and 70 per cent of the 15 million items of customer post received was processed within 15 working days (down from 83 per cent in 2013-14).
- Secured important new tools, including accelerated payments powers, which brought in £768m from tax avoiders last year, and the diverted profits tax, which will shortly secure more tax from multinationals that try to move their profits to other countries.
What does the report tell us?
A real cause for concern from the report is the terrible (and deteriorating) level of customer service admitted to by HMRC, against which its claims to have achieved cost savings, no doubt partly in return for a much poorer service to the ‘customer’ (as we are now called), ring a little hollow. Colleagues and clients tell me that waiting times of half an hour or more to get through to HMRC call centre personnel are not unusual. In this way, HMRC proves that not getting the right tax advice can be an expensive business in more ways than one!
But the HMRC annual report indicates much about where the department is deploying its attention and resources, which is in the continued drive against tax avoidance and ‘aggressive tax planning’ – terminology used by HMRC which indicates an intention to continue to narrow the parameters of what is deemed acceptable.
Whilst honest taxpayers and responsible advisers should have no fears about the exercise of reasonable powers by HMRC, it is a matter of legitimate interest to see that these are counterbalanced by HMRC having the resources to deal with the needs of taxpayers and agents to access support, guidance and a reasonable telephone and postal response.