Partner Article

Peace, goodwill and an ‘amnesty’ for all?

The festive season approaches but there is no sign of a seasonal lull in HMRC activity to crack down on tax avoiders and evaders.

After an Autumn Statement in which the Chancellor “re-enforced” his desire to crack-down hard on tax evasion and avoidance, HMRC has released new, easy to use forms for those participating in its ‘let property campaign’ for residential landlords.

HMRC’s increasingly acclaimed ‘clever technology’ suggests that there may be as many as 1.5 million residential landlords in the UK, whereas some estimates suggest that there may only be a third paying tax on rents from a second property.

No wonder, then, that HMRC wants to entice as many as possible to come forward voluntarily – the campaign will run until at least March 2015 and HMRC is clearly targeting a large part of the suggested £500m annual ‘tax gap’ believed to arise from this specific area.

Since 2007 there have been no less than eighteen separate tax disclosure facilities, aimed at different sectors or at specific sources of income. Raising more than £750m in total from disclosures and follow up, some of these campaigns have been quite successful – and some less so.

HMRC’s sophisticated CONNECT computer system almost certainly improves the process of data collection and risk analysis and is thus likely to make this piecemeal approach more lucrative for the Chancellor. However, as 2013 draws to a close and the next election in 2015 comes increasingly into sharp political focus, might this be a time for a more radical approach?

How about a general tax disclosure campaign (an ‘amnesty,’ if you must)? To be successful such a campaign would have to offer a simply way for errant taxpayers to put matters straight, coupled with immunity from criminal prosecution and ‘light touch’ penalties.

Of course, HMRC would have a fine line to walk – make the disclosure facility too attractive and those who have already come forward and owned up will cry foul. But, carefully structured, a ‘once and for all last chance’ campaign could put the icing on HMRC’s Christmas cake and prove to be a winner for the Chancellor, both economically and politically.

This was posted in Bdaily's Members' News section by Baker Tilly .