Tax investigations on the up

 Taxman gets tough on self-assessment

Accountants have reported that HMRC is disputing more self-assessment forms and making more money from investigating people"s tax affairs than ever before. The amount of money netted by the Revenue from personal tax investigations jumped 64% last year (from £856m to £1.4bn), as the increasing threat of court action discouraged people from fighting disputed tax claims. HMRC won 83% of the 1,200 self-assessment cases heard in court in the last financial year, and was particularly successful when disputing cases to do with film schemes, employee benefit schemes and managed service company arrangements. However, it has been claimed that HMRC is using too strict an interpretation of the law to put pressure on taxpayers. According to Jason Collins, head of tax at Pinsent Masons, the tax office believes that it is being underpaid by £6bn simply because it interprets the law differently from taxpayers and their accountants. He warned: “Any kind of tax planning is now being scrutinised by HMRC to see if it can be challenged - no area is off limits, and this is reflected in the recent jump in the tax gap relating to legal interpretation.”

Source: The Times (11/11/2017)