Chris Morgan, Head of Tax Policy at KPMG in the UK, comments on the Chancellor’s approach to his objective of raising £5 billion from tacking tax avoidance, evasion and imbalances.
“In years gone by, Chancellors would have made great play of the tax saved by closing loopholes that had been used in tax avoidance schemes disclosed under Disclosure of Tax Avoidance Schemes (DOTAS). More recently, this source has dried up as the last Government made great strides in stopping this sort of behaviour and George Osborne has tended to meet his target though changes in tax legislation that can be seen as removing unfairness.
“There is some of this in today’s Budget announcement but it is mainly in the realm of personal tax such as changing the non-dom rules, rather than in the business tax world.
“In this Budget, the Chancellor has placed greater focus on operational rather than legislative changes which see HMRC receiving an £800million package which appears to be directed at reducing the tax gap - £34 billion when last published. In particular, HMRC will have the funds to:
“There will also be additional resources and powers for HMRCs large business directorate where the Chancellor will have to wait until the OECD BEPS project reports later this year before he can complete his clampdown on perceived abuse by large corporates.
“Taken together, this adds up to a major assault on tax avoidance and evasion, and HMRC will be very pleased with the vote of confidence George Osborne has given it today. The more difficult question will be how HMRC will be able to find the people it will need, many of them requiring specialist skills, to put this plan into action.”
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Jess Liebmann, KPMG Corporate Communications
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.