HMRC’s annual report from the 2014/15 financial year has revealed around 10,000 accelerated payment notices were issued to individuals involved in tax avoidance schemes. They also announced they expect to issue a further 64,000 accelerated payment notices to both individuals and businesses involved in tax avoidance schemes. Furthermore, the report revealed 89.7% of complaints made to the regulator about HMRC were upheld in part or in full in 2013/14.
Under the accelerated payment rules, HMRC are able to make taxpayers pay disputed tax rather than stalling for the outcome of a tax tribunal ruling. If HMRC fail to win the case, the taxpayer will be repaid with interest.
Originally, it was thought that HMRC would obtain £210m by March 2015 however they received almost triple bringing in £596m, although they refunded £28m following legal challenges.
For the first time, HMRC sent 379 follower notices to tax avoidance users. These notices urge tax avoiders to pay disputed tax they owe after court rulings, these notices had a collective value of more than £170m in 2014/15.
A total of 2,311 complaints were reported in 2013/14, with 1,229 cases (53.2%) upheld in full and 844 (36.5%) partially upheld. HMRC has been under constant pressure following negative criticism over the handling of phone calls and letters. In June, they announced £45m would be allotted to improve their customer service, as statistics showed inconsistent call handling throughout 2014/15.
The most recent report shows HMRC saved £210m in cost efficiencies last year, through reducing estates, workforce and IT costs. It brings total cost savings in the past four years to £991m, exceeding targets by £25m.
In addition, the annual report reveals HMRC’s tax revenue increased by almost £12bn to £517.7bn, which attributed to economic growth and continued the crackdown on tax evasion and avoidance. From the £517.7bn, £163.1bn was from income tax, followed by £113.9bn through VAT. Around £108bn came via National Insurance contributions and £41.4bn was from Corporation Tax, around £27.2bn came from levies on hydrocarbon oils and £64bn through a variety of other taxes.
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