HMRC’s new powers to tackle electronic sales suppression
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The HMRC has agreed to publish further information about those involved in tax avoidance, following calls for increased transparency.
Responding to a report from the Treasury sub-committee on disputing tax, published in late July, the UK tax authority has agreed to explore options to publish additional information about the number and characteristics of those involved in tax avoidance on an annual basis.
Late last week, the government said it has considered the Treasury sub-committee’s (TSC’s) report, titled Disputing Tax, and set out its response to each of the conclusions and recommendations.
Among other things, the report questioned the HMRC about delays in providing settlement terms to those who wished to settle their affairs under the contractor loan settlement opportunity.
In its response, the HMRC said that the opportunity prompted a big response – over 19,000 expressions of interest were received by 5 April – and that additional resources were deployed to support the settlement process.
According to the authority, by 31 August over 99 per cent of users had received their settlement calculations. It assured that no one who provided the necessary information by 5 April will be disadvantaged if settlement of their case takes longer as a result of HMRC delay.
“HMRC’s systems do not monitor response times for this settlement activity on an automated basis. However, HMRC will publish further information about progress on settling cases in its 2019 to 2020 annual report,” it said.
The HMRC provided further details on the issue, adding that the government estimates that around 50,000 taxpayers who have been involved in disguised remuneration (DR) schemes are affected by the loan charge.
Under the DR settlement terms published in November 2017, more than 28,000 scheme users expressed an interest in settling their tax affairs, with over 19,000 returning their settlement packs with the information needed by 5 April 2019.
Since the loan charge was announced at budget 2016, and up to 30 June 2019, HMRC has agreed to around 8,000 settlements with employers and individuals, bringing into charge around £2 billion.
“It is too early to give the final figure for how many users of disguised remuneration schemes did not settle. It is also too early to say how many of those who need to pay the loan charge have complied with their filing obligations,” the HMRC noted.
It also pledged to work with the professional bodies to consider whether their standards are sufficiently clear about conduct relating to all stages at which their members may be called upon to provide advice on tax avoidance.
The HMRC added that it is exploring ways to raise standards more broadly in the paid tax agent market, including those agents who do not regularly engage with HMRC, and/or do not belong to any of the professional bodies, meaning they are not bound by the Professional Conduct in Relation to Taxation (PCRT).
For more information on the government’s response click here.,