Taxing the rich has been a popular sport recently, both abroad and in the UK. There was every chance that the Chancellor would use today’s Autumn Statement to make another raid on the deep pocketed. Instead, he has (for now) directed most of his attention at tax cheats.
Along with the headline-grabbing (but relatively minor) reductions in tax rates, today’s statement contains more than the usual collection of anti-avoidance and anti-evasion measures.
In short, new powers and resources for HMRC to target tax cheats, particularly those hiding their funds offshore (see my piece below re the UK/Swiss agreement). HMRC are to get new powers to collect information from third party providers, such as those who process card payments. New specialist teams of fraud and evasion investigators will be established. HMRC will obtain more information from US tax authorities. Additional resources will be devoted to IHT avoidance using offshore trusts, bank accounts and other entities. HMRC’s Affluent Unit will now deal with any taxpayers with a net worth of £1 million (currently this threshold is £2.5m).
Very few changes in tax law have been announced. No update on the statutory residence rule, due to be introduced next year. No significant changes are proposed to the non-dom regime, so (on this occasion) the Government has kept is promise not to introduce any further significant changes to that regime during the life of this parliament. No general mansion tax is to be introduced. No further details have yet been released on the proposed annual charge (a limited form of mansion tax) and extended capital gains tax charge affecting residential properties, valued at £2m or more, and held through companies. We will have to wait until next week for these when we are expecting draft legislation to be published.
What’s does it all mean?
Today’s statement will have little impact for wealthy taxpayers who comply with their UK tax obligations. The real “crunch”, however, may come next week when we are due to see the details of the proposals announced in the Budget in March 2012.