HMRC collects £400 million extra in income tax after avoidance crackdown

The figure is up 80% on the 2014/15 financial year.

Her Majesty’s Revenue & Customs’ tough, new policy on tax avoidance schemes saw income tax receipts jump by £400 million in 2016, a Freedom of Information request has revealed.

HMRC Counter Avoidance Directorate, a specialist unit that was set up in 2014, collected a total of £886 million from people who had tried to avoid paying tax by signing up to such schemes. The figure amounted to an 80% rise on the £494 million reclaimed during the previous 2014/15 financial year.

The tax office has become tougher on avoidance over the last two years, introducing “accelerated payment notices”, which must be paid within 90 days. While 3,000 of the 60,000 notices issued were recalled, they have raised a huge £3 billion since being introduced.

As of 1 January, HMRC can also publicly name and shame tax advisers, accountants and lawyers who help the super-rich undertake offshore tax evasion. The government has likewise implemented steep, new fines for both individuals or organisations involved in such activity, which amount to up to 100% of the tax they helped evade or £3,000, whichever is highest.

A new corporate criminal offence of failing to prevent the facilitation of tax evasion will also be introduced this year. It means that companies will be held liable if an individual acting on their behalf as an employee or contractor makes such activity possible. In the past, a corporate criminal prosecution was only possible if there was proof that the board of directors were aware and involved in facilitating such action.