HMRC has increased investment in its counter-avoidance directorate staff by seven percent over the last year as part of its crackdown on marketed tax avoidance schemes, according to law firm Collyer Bristow.
Investment in the counter-avoidance directorate (CAD), which was created in 2014 and brings together operational and policy work on marketed tax avoidance schemes into a single directorate, has increased from £54.9 million in 2014/15 to £58.6 million in 2015/16.
Collyer Bristow notes the concentration of expertise at the CAS has proved successful in helping HMRC crackdown on tax avoidance, with investigations undertaken by the directorate led to additional income tax receipts increasing 79 percent last year from £494 million in 2014/15 to £886 million in 2015/16.
The increased investment in staff at the CAD comes ahead of the introduction of the Criminal Finance Act in September, which will allow HMRC to impose tougher penalties on accountants and advisers who market tax avoidance schemes.
Partner and head of private client team at Collyer Bristow, James Badcock, commented: “HMRC’s latest investment shows it’s continuing to turn up the heat on marketed tax avoidance schemes.
“Investigations undertaken by the counter-avoidance directorate resulted in HMRC collecting an additional total of £2 billion last year. Further investment will likely increase receipts even further.”
He continued: “Tax avoidance schemes are generally devised and marketed by specialist advisory firms, and while they may be based on a plausible technical interpretation of tax law, a growing array of hurdles have been placed in their way meaning participants can become embroiled in lengthy and costly investigations and legal proceedings.
“Once the Criminal Finance Act comes into force, if an employee is suspected of facilitating tax avoidance, then the company they work for is also automatically under suspicion. With this in mind, many companies are likely to reassess their offering with regards to avoidance schemes.”
Mr Badcock concluded: “There is no sign of HMRC letting up and anyone considering entering into a marketed tax avoidance scheme should seek professional advice.”
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