Tax avoidance and fraud

Focus on tax avoidance and evasion

The Chancellor boasted that since 2010, £140bn had been raised in tackling tax avoidance, evasion and non-compliance. Despite this success he proposed a number of further measures.

New rules were announced to prevent promoters of tax avoidance schemes circumventing disclosure rules by reorganising their businesses. The Government reaffirmed its commitment to introducing penalties for ‘enablers’ of tax avoidance schemes that are later defeated by HMRC.

In relation to VAT, the Government will consult on measures to combat the increasing level of ‘missing trader’ fraud within the construction industry, including the use of the reverse charge mechanism. A call for evidence will also be issued to inform how a new VAT collection mechanism for online marketplaces might operate.

Among other measures, following a review by the Public Accounts Committee, HMRC is to issue guidance to employers that make payments for ‘image rights’ under separate contractual arrangements, typically concerning sports stars and others in the media spotlight. Use of the ‘employment allowance’ will also be monitored in view of a number of avoidance schemes having been identified, with further action to be taken if such activity continues. In addition, the Department for Work & Pensions will work with an external data provider to better identify fraud and error caused by undeclared partners.