HMRC firepower is trained on large firms

AN £800m boost to HMRC’s firepower and a drive to simplify taxes were at the heart of a ‘major assault’ on tax dodging announced yesterday.

In a move dubbed a ‘game changer’, the Chancellor will boost the organisation in charge of making the tax system simpler and more transparent.

The Office of Tax Simplification (OTS), set up in 2010, will become permanent, with an expanded role and more staff – a move revealed in yesterday’s Mail.

Kevin Nicholson, head of tax at PwC, said the body would have teeth to cut through the overgrowth of tax legislation.

He said: ‘Expanding the role and capacity of the OTS could be a game changer for tax policy.’

The move comes with a huge expansion of HMRC’s power and funding to prevent large firms running rings around authorities.

The number of criminal investigations the revenue can carry out will be tripled, with the aim of pursuing 100 prosecutions a year by 2020. HMRC will receive £60m in extra funding to help it step up criminal investigations.

Any company that is persistently ‘aggressive’ in its tax avoidance will be put into special measures, the Chancellor announced.

A voluntary code of practice defining the standards HMRC expects large businesses to meet will be established and new rules introduced to prevent firms using tax losses to whittle down tax charges on overseas operations.

From midnight, companies were also banned from writing down the value of brand and reputation to cut their tax bills.

Chris Morgan, head of tax policy at KPMG, said: ‘This adds up to a major assault on tax avoidance and evasion, and HMRC will be very pleased with the vote of confidence George Osborne has given it today.’

The OTS will be put on a statutory footing from 2016.