Click here to
Get an instant quote

HMRC in 2014: how the taxman has hit the headlines

HMRC has featured in some of the top stories during the first few months of 2014, especially in the investment of extra funds by the Government to tackle fraud and tax avoidance. HMRC has also been featured in the news connected to support for small businesses in the UK, increasing a number of allowances and reliefs. Personal allowances have likewise increased during 2014, reducing the amount of tax paid by those on lower incomes.

Crackdown on tax avoidance

The Chancellor of the Exchequer, George Osborne, stated that HMRC would be given a larger budget and increased powers to tackle the problem of tax evasion and avoidance. When delivering the 2014 Budget, Osborne said:

“While the vast majority of wealthy people pay their taxes, there is still a small minority who do not. We will now require those who have signed up to disclosed tax avoidance schemes to pay their taxes, like everyone else, up front.”

HMRC made a pledge in February 2014 to address the problem of companies taking part in tax evasion and avoidance. The enforcement and compliance director general at HMRC, Jennie Granger, spoke of people who have offshore assets, adding that most people inform HMRC of them. She added that those who didn’t inform HMRC of their assets would be caught.

Avoidance schemes

No Safe Havens is the latest document released by HMRC that details plans to make it a criminal offence to hold undeclared money in an offshore account, even if tax evasion wasn’t the intention. The current situation is that HMRC has to prove that evasion is intended by an individual on foreign income.

Tax campaigns

HMRC has launched a number of successful tax campaigns that invite people from specified sectors to come forward and declare untaxed income. The latest campaigns in 2014 include the Second Income campaign and Let Property campaign. A drive was also launched to target those with offshore accounts holding undeclared income.

Increased support for companies

The Annual Investment Allowance has been increased from £250,000 to £500,000, until 31st December 2015. This is an incentive for businesses to make investments in machinery or plant.

Employment Allowance has been introduced to encourage employers to hire more staff; the move will be beneficial for around 1.25 million companies, charities and other organisations. Just under half a million businesses won’t have to pay employer’s National Insurance at all, thanks to the new initiative. From 6th April 2014, employers won’t have to pay up to £2,000 of National Insurance Contributions for their employees.

Tax allowances and rate thresholds

Those people who receive a lower income will benefit from the increased personal allowances for the 2014-15 year, which will increase to £10,000. The threshold for higher rates will also increase this year to £41,865.

So far, 2014 has witnessed a number of significant changes to the regulations that govern tax, and it remains to be seen whether or not HMRC will continue to tackle tax evasion and avoidance with as much drive.

Posted by Mark
May 13, 2014

No Comments »

No comments yet.

RSS feed for comments on this post. TrackBack URL

Leave a comment