This move is part of a plethora of changes which chancellor George Osborne hopes will boost the Government’s coffers by an extra £7.2bn in tax receipts in a year.
Osborne also announced that “tough new penalties” would be added to the Government’s General Anti-Abuse Rule (GAAR), a piece of legislation which defines abusive tax arrangements.
HM Revenue & Customs will be granted about £750m in investment to help it go after tax fraud, offshore trusts and the businesses of the hidden economy, Osborne revealed.
This extra cash, he said, would triple the number of wealthy evaders the Revenue pursues for prosecution.
Nowhere to hide
“In Budget after Budget, we have done more to combat this than any government before us.
“We inherited a system where bankers boasted of paying lower tax rates than their cleaners, and some multinationals shifted all their profits offshore,” he said. “We’ve stopped these blatant abuses that were allowed to flourish, and many others.
“These people should have nowhere to hide.”
Disappointing
Neal Todd, partner at City law firm Berwin Leighton Paisner, said it is disappointing that the chancellor has decided to introduce more penalties for tax planning that falls foul of the GAAR.
“The GAAR has only recently been introduced to the UK tax system (it became law in 2013) and its ambit is wide and uncertain,” he said.
“No case involved in the GAAR has yet come before the UK courts and it seems very premature for the government to be adding back bone to a weapon that has yet to be judicially tested.”
Ambitious
James Hender, partner and head of the private wealth group at Saffery Champness, said the chancellor’s plan to raise £7.2bn in tax by increasing investment into HMRC is “ambitious”.
“There is only so much that changing the law will do,” he said. “We wait to see whether HMRC will be properly supported in this drive.”
