It seems everyone enjoys a good quiz so, question 1. Here are the names of some well known celebrities:
What do they have in common?
The answer? They have all been accused by HM Revenue & Customs (“HMRC”) of entering into tax evasion schemes and could face substantial bills. It is understood Gary Barlow could be facing as much as £20 million! Now, before any of you start criticising them you need to consider the bigger picture.
The 2012-13 tax year saw HMRC investigation targets increase from 119,018 to 237,215 resulting in additional tax recoveries in excess of £20.7 billion. These recoveries are the highest since records began and with the “Increased activity” as HMRC put it the level of investigations appears likely to increase still further.
Taxpayers should read the above with quiet satisfaction as it shows HMRC are hunting down tax evaders. However, before getting too carried away we should come back to Earth because HMRC have not increased investigation activity at the expense of pursuing the day-to-day tax recoveries. It remains the case HMRC represent 75% of all winding up and bankruptcy petitions and are ever-present on insolvency estates we handle. They also seek the appointment of enforcement officers who can simply turn up on your doorstep armed with a distraint notice where they will look to remove goods unless you pay the debt.
Should you not believe the above is enough of a burden to cope with the Finance Act 2014 will come into effect next year and grants HMRC the power to demand payments directly from the bank account of long term offenders. Couple this with compliance of the real time initiative and exercising these powers could be disruptive to business operations in general.
So, what is the message? It is pretty simple really. Do not attempt to trade at the expense of HMRC, which is an offence in any event. If you are (or will likely to be) accruing tax liabilities where affordability to pay is a genuine concern you must seek independent and professional advice at the earliest time. Addressing the issue early promotes reaching a commercial solution. Bury your head and you are merely increasing the wrath of HMRC, which could be damaging and costly.