HMRC spend on tax investigations brings in even higher returns
Thursday, 08 November 2018
New data shows that HMRC’s tax take has been bolstered by more successful investigations into individuals and SMEs. The investigation units that focus on those small businesses and individuals collected £16 extra in taxes for every £1 spent on their investigatory staff in 2016/17, up on the £15 collected the year before.
To put this into perspective, investors in the stock market over the last 30 years have seen an annual return of 7.2%. HMRC’s investment into tax investigations is returning a remarkable 1500%.
The high returns that HMRC get from these investigations mean that it would be no surprise to see even more money ploughed into these investigations to increase HMRC’s coffers further.
The team looking into individuals and SMEs investigate a broad number of taxes, including VAT, income tax, and National Insurance contributions.
In the hunt for even greater returns for the Government there are a number of ways HMRC may choose to spend any extra funding. HMRC may, for instance, look to increase the size of its investigation teams at these directorates as well as possibly investigating a much broader base of tax arrangements and schemes.
The Treasury has already pledged an extra £1.8 billion to HMRC in the lead-up to 2020 to collect even more additional tax and increase the number of tax investigations. In return for this additional amount from Government, HMRC have committed to collecting nearly £1 billion of additional tax revenue annually by 2020-21.
HMRC have been known to see individuals and small businesses as a soft target, as they often don’t have the same resources as large businesses, and can’t negotiate with tax inspectors to close down or limit tax investigations.
With HMRC looking to increase its yield, both individuals and businesses need to be more careful than ever about their tax practices and review their current arrangements.
You can protect yourself against the cost of most tax investigations by subscribing to our Tax Fee Protection Service. To find out more, call 0330 024 0888 or email email@example.com.