Crackdown on tax loopholes rakes in an extra £1billion
TAX investigators have clawed back an extra £1billion over the last year in an unprecedented crackdown on payment loopholes.
Figures published today show HMRC increased the amount of revenue it collected through “avoidance scheme” inquiries by nearly 50 per cent.
Investigators scrutinised film partnerships used by millionaire celebrities like David Beckham and Ant and Dec.
But they have also targeted ordinary people who had the so-called Loan Charge scheme thrust upon them by employers.
As part of the measure, companies can make their workers take a tax-free, non-returnable loan instead of paying them a bona fide wage.
The scheme means both employer and employees escape paying National Insurance, but HMRC has started chasing up the workers for their unpaid tax. report by accountants UHY Hacker Young says tax authorities have managed to close down many systems used to lighten the tax burden.
Mike Crellin, director of UHY Hacker Young, said: “HMRC’s focus on eliminating the use of tax avoidance schemes is delivering impressive results.
“Fewer schemes are being launched and HMRC is sweeping up more of the taxpayers who have bought into these schemes.”
The company said that in the year ending March 31, investigations had yielded £2.7billion in tax.
Figures for the previous year showed £1.8billion was harvested through inquiries into avoidance schemes.
Scrutiny of avoided income tax accounted for £1.5billion (56 per cent) of the total, compared to £753million (42 per cent) the previous year.
Ingenious Media – the company used by former England captain Beckham and TV presenters Ant and Dec – helped clients reduce their tax burden by using their wealth to fund movies.
By investing in more than 60 films including Avatar, the famous names were able to qualify for tax relief.
Ingenious is currently appealing against HMRC’s decision to ban favourable tax rates on the film investments.
Mr Crellin said the taxman also made a fortune out of the Loan Charge scheme, by giving workers who signed up a deadline for payment.
Crippling
“The Loan Charge deadline led to a bumper year for HMRC, but a lot of that money was squeezed out of taxpayers who never realised they were buying into a tax avoidance scheme.
“Many of those taxpayers had to sell their assets to pay those crippling tax bills.
“Nobody can fault HMRC’s targeting of tax avoidance, but many of its methods are causing some alarm.”