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News - 18 November 2014

HMRC told to speed up tax investigations

The Public Accounts Committee (PAC) has criticised HMRC for not bringing cases to court fast enough.

Margaret Hodge, chair of the committee highlighted that a tax avoidance scheme closed down in 2009 was not taken to a tribunal until this year.

Up to £10m of taxes avoided by 2,000 users of a scheme known as Liberty may not be recoverable, the Labour MP said, because in 30 cases HMRC failed to start inquiries into personal tax returns within the 12 month deadline.

Stuart Coleman, Manager of the Tax Department of ABDS comments:
“Liberty was an investment scheme which created a tax loss for investors that they could offset against other income. It was used by an estimated 2,000 people including some doctors, judges and reputedly some celebrities including singer Katie Melua, George Michael and Gary Barlow.”

Margaret Hodge said: "Although HMRC says Liberty was an exceptional case among the 750,000 personal tax return inquiries each year, it was unable to tell us how much delays had cost across the different tax avoidance schemes."

The PAC report also raised concerns about HMRC's progress tackling information from the so-called Falciani list, which identified 3,600 Britons potentially avoiding tax using the Geneva branch of HSBC.

The committee found that the agency had received £135m from individuals on the list, compared to £220m received by Spain and £188m recovered by France.

The PAC also said that HMRC failed to properly tackle companies that took advantage of international tax structures to reduce their UK liabilities.

"Research into seven companies who have recently relocated to the UK for tax purposes showed very little inward investment was generated or jobs created in the UK in return for the tax benefits the companies receive," Mrs Hodge said.

The committee also found that HMRC presented "misleading information" to Parliament about its improvements in collecting cash from tax avoidance, evasion and crime after a £1.9bn error in the way its targets were set.

HMRC said: "We will work closely with the National Audit Office to ensure there is no repeat of the base line error for which we apologised to the committee.

"However, even taking this into account, we exceeded our targets for tackling tax dodgers and criminal gangs every year since 2010."

If you need any help and advice with your Tax returns and declarations, contact Lavinia Newman, Stuart Coleman or Liz Kennett to discuss how ABDS can help in all your financial and business planning.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net
Brilliant with numbers   
Great with people  
Clear and precise with advice
Timely and cost effective 
In touch with issues that face our clients and
mindful of their long term strategic goals 

Helping Your Business is Our Business

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