He said those who have signed up to disclosed tax avoidance schemes will now have to “pay their taxes, like everyone else, up front” before mentioning that the number of tax avoidance schemes had dropped by half in 2013.
Full details of the legislature were not provided, but they can be found in the full, 121 page Budget statement. This was uploaded to the Treasury’s website soon after the speech ended early this afternoon.
Those accused of tax avoidance will have an opportunity to go to court to appeal against their charges.
If the case is won all the money will be returned interest free.
Osborne also announced that he will be increasing HMRC’s budget for handling tax non-compliance as well as introducing a cornucopia of restrictive measures.
Transfers of profits between companies within groups to avoid tax will now be blocked.
Tax credit debt recovery rates for those with sufficient earnings will be increased.
HMRC will now have powers to collect debts from bank accounts of people who can afford to pay taxes but have repeatedly refused. Osborne said this will bring Britain in line with most other Western countries.
He also announced increases in compliance checks on migrant benefits and actions to curb potential misuse of the EIS and VCT schemes.
He concluded by saying “this abuse will end”.
Another measure likely to potentially affect those living outside the UK was a plan to expand the 15% stamp duty on residential properties purchased through companies to those homes worth £500,000 or more, from the previous ceiling of £2m.
Osborne said many of these were empty properties held in corporate enveloped to avoid stamp duty.
“You have earned it; you have saved it; and this government is on your side,” said the chancellor at the end of his speech.
Other key points in the budget:
-Tax free income will be raised to £10,500
-The threshold for 40p income tax will rise from £41,450 to £41,865 next month and by a further 1% to £42,285 next year
-Beer tax will be reduced by 1 pence.
– Cash and stock ISAs will be merged to create a single New ISA in what Osborne called a bid to “help savers”.
– The limit for ISAs will be increased to £15,000. The limit for Junior ISAs will also be raised to £4000.
-A new pensioner bond will be introduced for over-65s. Osborne predicted rates of 2.8% for a one year bond and 4% on a three year bond which he called “much better than anything equivalent in the market today. A maximum of £10,000 will be allowed in each bond.
-The first £5000 of savings will no longer have a 10 pence charge. Osborne said the tax was complex and penalised low income savers.
-Tax restrictions on pensioners’ access to their pension pots will be removed. Pensioners will now have complete freedom to draw out their money. Osborne said this will completely remove the need for an annuity.
-The taxable part of a pension pot taken as cash on retirement will now be charged at normal income tax rate, down from 55%.
As reported, a consultation of stakeholders on the idea of requiring those involved in tax disputes that involve an avoidance scheme that HMRC considers to be the same as one it was defeated in court last month.
To read and download the full Budget statement from the Treasury's website, click here.
