HMRC is cracking down on tax evasion with higher penalties for those who pay fees late, as HMRC recruits a whopping 500 new officers in a bid to claw back cash and weed out rule-breakers.
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A HMRC taskforce of 500 people are set to “crack down” on the eye-watering £44 billion tax gap. HMRC is cracking down on tax evasion with higher penalties for those who pay fees late, as HMRC recruits a whopping 500 new officers in a bid to claw back cash and weed out rule-breakers.
Charlene Young, senior pensions and savings expert at AJ Bell, has spoken out over the tax department’s new clampdown.
Ms Young said: “One thing that’s always found on our Budget bingo card is a crackdown on tax evasion. It’s no surprise given the £44 billion of unpaid tax due to HMRC, a figure more than double the level five years ago according to the Spring Statement documents.
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“In addition to measures to tackle non-compliance announced in her October budget and plans to pay tax whistleblowers a share of tax they help to recover, the chancellor has committed to fund over 500 extra compliance officers and new technology to aid automated recovery.
“With taxpayers facing hours on hold to HMRC in recent years, or even being chucked off a waiting call, it’s fair to assume that the push to digital and increased fines with tighter timescales will be met with a degree of cynicism.”
A shift to ‘Making Tax Digital’ will come with higher penalties for late payment from April 2025 in a two-tier penalty system while under the new rules, a taxpayer owing £25,000 income tax will owe over £28,000 after four months.
The new rules were unveiled by the Labour Party after the Spring Statement from Chancellor Rachel Reeves last week.
Under MTD, late payment penalties for VAT taxpayers and income taxpayers will be 3% of the tax outstanding where tax is overdue by 15 days; plus 3% where tax is overdue by 30 days.
That is plus 10% a year where tax is overdue by 31 days or more.