Further evidence is emerging the HM Revenue and Customs (HMRC) is aggressively ramping up its efforts to suppress tax and national insurance contribution avoidance activities.
Individuals or companies who have used dubious tax minimisation methods to slash tax due on their employees’ incomes are especially in the Revenue’s line of fire. These potentially include a number of recruitment firms and several offshore Umbrella Companies that seek to flout national tax obligations by employing UK workers while being headquartered in non-UK jurisdictions.
HMRC is currently seeking to recover tax and NIC debts totalling £1,460,792 owed by 156 companies, which have been issued with debt transfer notices. These notices oblige the employing company to pay tax owed within three months and were included in managed service company legislation that became operative in January 2008.
Following a Freedom of Information (FOI) request, the law firm Lawspeed found that 142 debt transfer notices were issued during the tax year ending in April 2011. While none were issued during the tax year 2011-2012, 981 have been issued since 6th April 2012 to recover the above-mentioned debts.
One prominent critic of tax avoidance activity, Staffline CEO Andy Hogarth, said that the new figures represent “a very significant increase.”
HMRC’s efforts do not stop there. The Revenue is also collaborating with US and Australian government officials to sift through more than 400GB of data containing details of the extensive use of complex offshore structures designed expressly to assist wealthy individuals and companies to conceal assets.
HMRC is now urging anyone who is currently using offshore structures to seek professional tax advice or risk being named and shamed, as well as facing stiff fines and criminal prosecution.