Employers could have problems getting to grips with the new overly complex regulations regarding employees’ tax avoidance schemes that have been detailed in the Finance Bill, according to tax advisers.
Contractors might be interested to learn that HMRC is going to impose penalties of up to 200% on individuals found guilty of tax and capital gains evasion.
Last December, two British citizens were arrested on suspicion of hiding money in Swiss bank accounts to evade paying UK taxes.
Union officials have warned that cuts to HMRC’s budget will lead to an increase in tax evasion and widen the gap between the revenue recovered and the amount actually due.
A new report from the National Audit Office says that HMRC raised £8.5bn from its investigations into cases of serious tax evasion.
Umbrella company contractors and other freelance workers have been warned to be cautious of schemes that claim to be HMRC approved, when really they are referring to the reference number allocated to a scheme.
A fivefold increase in prosecutions against tax evaders could see HMRC bringing 800 people a year to court. In the year to September 30 2009, the Revenue brought 157 prosecutions against individuals.
Last week HMRC sent out letters to some of the taxpayers who had taken up the Offshore Disclosure Facility to ask them for their insights.
HMRC is set to increase its investigations into tax avoidance and contractors not operating via an umbrella company may wish to get advice from a specialist accountant to ensure that all their tax matters are in order.
The government has announced that they will once again look at whether a general anti-avoidance rule should be introduced as a measure to deter limited company tax evaders.
HMRC is in line for a tough year as they face more cost cuts whilst continuing to find and chase tax evaders. This could have a knock on effect on those who work through umbrella companies.
