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New legal powers to tackle tax evaders and the promoters and users of avoidance schemes
Alongside the Budget 2013, on 20 March 2013 the Government published a progress report on tackling avoidance and evasion. The report states that almost £1 billion is being invested in HM Revenue and Customs (HMRC) in an unprecedented clampdown on avoidance and evasion. HMRC will also have new legal powers to tackle tax evaders and the promoters and users of avoidance schemes.
Tackling tax evasion and avoidance: 2013 Budget
Key targets include tax avoidance schemes, offshore tax evasion and avoidance of employment taxes.
Tax avoidance schemes
The Government announced measures to close loopholes, enhance disclosure obligations and focus on high-risk promoters of tax avoidance schemes.
Offshore tax evasion
Agreements with the Isle of Man, Guernsey and Jersey aim to increase the amount of information automatically exchanged on potentially taxable income, in order to identify and tackle evasion. This is building on greater sharing of information between governments including the enhanced automatic exchange agreement signed with the USA last year.
Avoidance of employment taxes
The Government plans to strengthen obligations to ensure the correct income tax and NICs are paid by offshore employment intermediaries, with consultation on the details.
In January it was announced that the Crown Prosecution Service (CPS) intends to substantially increase the number of tax cases it takes on with a view to criminal prosecution. HMRC investigates tax avoidance and evasion in the UK and then passes the files to the CPS to make a decision on charge and criminal prosecution.
Tax payers with undeclared income or who been involved in tax mitigation arrangements that are not to HMRC’s liking are increasingly at risk of being subject to criminal investigation and prosecution. Primary targets are not only the architects of dishonest schemes, or the tax consultants who promote them but also those who have invested in them.
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