Tax Avoidance and tax evasion in the July Budget.

The newly elected Conservative government will set out its plans to tackle tax avoidance and tax evasion in the July Budget.

The issue of tax avoidance was raised by all parties during the recent election campaign. The previous coalition government announced a number of initiatives in order to clampdown on what it considered as aggressive tax planning, tax avoidance and evasion.

HMRC was given new powers to issue Accelerated Payment Notices (APNs) to those suspected of tax avoidance, which required payment of unpaid tax ahead of an appeal process. The initiative divided opinion, but it was seen as a key tactic in recovering unpaid tax.

Through issuing Accelerated Payment Notices (APNs), HMRC expects to recover an estimated £8bn of unpaid tax from those is suspects of tax evasion (i.e. deliberately avoiding tax through arrangements such as Film Partnership Schemes).

In addition to the continuation of the use of APNs, the government will aim to recover £5bn from those suspected of offshore tax avoidance (i.e. those who have failed to declare income in the UK from assets and bank accounts held overseas). This will be achieved through the Common Reporting Standard announced by the OECD through which foreign tax authorities will openly share information about individuals and their bank accounts. The initiative will begin in 2017.

The previous government also announced the early closure of tax disclosure facilities such as the Liechtenstein Disclosure Facility (LDF). Such voluntary disclosure facilities offered individuals the possibility of reduced penalties and immunity from criminal prosecution. All voluntary disclosure facilities will cease at the end of 2015.

For anyone who has undeclared tax, the net will continue to close as the government continues to aim to reduce the UK tax deficit. Among many others, those who will fall onto the radar of HMRC are those who have used tax planning strategies such as Film Partnership Schemes, as well as those with assets and bank accounts overseas.

With tax disclosure facilities closing at the end of 2015 the time to act is now in order to bring your tax affairs up to date rather than running the risk of facing a full HMRC investigation, or even finding yourself in receipt of an Accelerated Payment Notice requiring you to pay in full the amount that HMRC believes you have deliberately unpaid in tax.

To speak to our experienced and confidential tax investigations professionals call 0113 387 5670 or fill out an Enquiry Form and we will contact you directly to discuss your tax affairs in complete confidence.