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HMRC sends serious signals about tax avoidance clampdown

the Her Majesty’s Revenue & Customs has been dropping some serious hints about going after tax avoidance amongst the affluent.

If you make more than £150,000 per annum, better watch out – HMRC may just have you squarely in its sights. With the Treasury under increasing pressure to rake in as much filthy lucre as it can and budget cuts practically crippling the Government, the taxman is keen to squeeze every stone in the British Isles until it bleeds, and now big earners are up on the chopping block.

This, I have to say, is an incredibly pleasant shift in tactics from the tactics seemingly employed by HMRC in years past, as the tax authority has seemed to be keen on harassing contractors and other self-employed Brits with all sorts of schemes designed to separate them from their earnings, all the while leaving the biggest earners unmolested to swim about in their vast piles of money. Now, however, it seems that the Government is gearing up to take down the bigger fish instead, if the fact that the last two years has seen the number of employees in HMRC’s Affluent Unit balloon by some 54 per cent – and that is funding has gone up by 68 per cent as well. In other words, the taxman wants to have the ability to go after high earners hiding behind tax planning schemes thought up by the cadres of accountants the less successful Brit can’t afford to hire.

So what’s going to make you more susceptible to an examination by the Affluent Unit? Well if you’ve been harbouring assets offshore in the form of property or in bank accounts, that’s a surefire way to get a visit. If you’ve been paying little in the way of income tax even though your earnings are high you’re likely to get a little visit as well, even if you’ve been using legal means to do so. All of these things are strong indications that you might not have been paying your fair share in taxes. That’s HMRC’s opinion of the matter, of course – and the definition of “not paying your fair share” is certainly widening as of late, as evidenced by how the tax authority has been targeting freelancers left and right. But don’t worry, I’m sure you won’t be affected by this new initiative. You’ve been forthright with all your self-assessments, of course – haven’t you?

Oh dear. Well, hope you have a good contractor accountant in your corner when the Affluent Unit comes a-knocking, mate.

 

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