Increased resources for HMRC
The Chief Secretary to the Treasury, Danny Alexander, announced on 20 September 2010 that an additional £900m will be made available to HMRC to reduce non-compliance in the tax system.
£900m is to be made available to HMRC over the spending review period to raise additional revenues from those who the Government considers undermine the tax system and seek to avoid paying their 'fair share' of tax.
With this latest initiative, the Government has signalled that it intends to continue its existing crackdown on tax avoidance; in particular, it is intended that there will be a fivefold increase in criminal prosecutions brought against those individuals suspected of tax evasion.
Mr Alexander's announcement is significant. For many years, HMRC has conducted a relatively small number of prosecutions for tax fraud, preferring instead to conduct civil investigations. It would appear that in the future, HMRC is going to make far more use of the criminal powers provided to it under the Police and Criminal Evidence Act 1984. This will inevitably lead to more 'dawn raids', arrests, interviews under caution and criminal charges being laid before the courts.
A large amount of funding is going to be available to tackle those engaged in tax evasion and, with this announcement, the Government is sending out a clear message that there will be no let up in HMRC's targeting of tax evaders. Those suspected of tax evasion can expect little sympathy from a revitalised HMRC.