Thursday, November 3, 2011
The UK government is focussing on wealthy individuals with overseas property in its ongoing crackdown on tax avoidance.
HM Revenue and Customs has announced that a new team of specialists drawn from across the department began work last month on a project that will utilize "sophisticated data mining techniques" to identify individuals who own property and land abroad. Risk assessment tools are then being used to highlight those people who do not appear able legitimately to afford the property, as well as those who do not appear to be declaring the correct income and gains from the property.
The government has earmarked more than GBP900m (USD1.44bn) to a comprehensive campaign to tackle tax avoidance and evasion. HMRC's so-called “affluent team” was announced by Chief Secretary to the Treasury, Danny Alexander, on September 18, and other targets in HMRC's sights going forward will include commodity traders and offshore accounts holders. These coordinated actions will involve teams who deal with corporate entities, residence and domicile issues, and trusts and estates.
“The government is committed to tackling tax evasion and avoidance across all areas of the economy," said Exchequer Secretary to the Treasury, David Gauke. "That is why we allocated HMRC GBP917m to reduce the tax gap over the next four years in the last Spending Review. This new team is part of that investment."
As a result of this investment in compliance campaigns, HMRC hopes to raise additional revenues of GBP7bn a year by 2014-15.
Figures released by HMRC on September 21 show the tax gap for 2009-10 was an estimated 7.9% of liabilities, at around GBP35bn. This is slightly down from 2008-09, when the gap stood at 8.1% of liabilities. According to HMRC, this is at the lower end of the range of countries who publish their tax gaps.