Government to clamp down on tax non-compliance

The Treasury has signalled its intention to act against those who do not comply with the UK’s tax laws.

Speaking at an international conference on tax analysis, Stephen Timms, the financial secretary to the Treasury, said that the pre-Budget Report will include new rules aimed at strengthening the disclosure regime, making disclosure requirements broader, and increasing the penalties for non-compliance.

The minister highlighted HMRC’s latest campaign to encourage people with undeclared offshore funds to notify the tax authorities of any liabilities owing on the money.

Mr Timms said that the government will be taking steps to combat rule breaking in the UK too.

He said that the public associate tax evasion with wealthy individuals or large, highly mobile corporates but added that it is equally important that individual taxpayers and smaller businesses also comply with the rules.

Mr Timms commented: “We need to see all members of the small business community living up to the standards of the great majority. We are committed to helping those who want to do the right thing.

“Over the past 3 years, HMRC has been improving its support to taxpayers through clearer guidance and tools; and accessible and timely help. Early results are encouraging, with 40 per cent of small businesses reporting that tax is getting easier to do.”

The minister continued by pointing out that, last year, HMRC made over 870,000 compliance interventions, identifying almost £12 billion in extra tax due. Some £57 million of assets were seized.

Under HMRC’s new powers, Mr Timms said, those who evade tax of more than £5,000 can expect more onerous reporting obligations for up to 5 years, while those who evade tax of more than £25,000 will have their names and addresses published, with details of the tax evaded and the penalty they have been charged.