HMRC to deploy more resources to tackle tax avoidance

28 October 2019

HMRC’s director general of customer compliance, Penny Ciniewicz has confirmed that more resources will be assigned to tackle tax avoidance schemes throughout the UK.

She advised that there were currently over 100 ongoing investigations into the matter and that there were measures in place to identify, and then combat, anybody who actively promoted tax avoidance. There is a whole chain of parties involved in these schemes and HMRC is committed to intercepting them, with potentially implicated individuals ranging from accountants and financial advisers to those who originally designed the schemes.

The Financial Adviser reported that Ciniewicz made the pledge at the recent Treasury select committee evidence session. She went on to say that one of the ways the Revenue is doing this is by monitoring “PAYE or real time information that might indicate people are getting involved in avoidance” and writing to customers to nudge them away from avoidance if HMRC thinks they may be getting into that space.

Ciniewicz was responding to questions from the committee about HMRC’s controversial loan charge. The loan charge applies where people received remuneration under the guise of being a loan, but the loan was never intended to be paid back. This was done to avoid tax and National Insurance deductions being made resulting in the tax office treating them as tax avoidance and cases are being investigated dating back as far as 1999.

Although the loans were legal at the time, in the 2016 Budget the government confirmed it intended to ban the practice and have the tax repaid, and those affected by the policy were given an April 2019 deadline to settle or declare their tax bills and failing that would be levied the additional loan charge.

The controversial loan charge policy is currently subject to an independent review following months of pressure from MPs, taxpayers and campaigners. The CIPP reported on this back in September 2019.

HMRC has published guidance on how to manually calculate deductions due on the loan charge and explains the requirement to report the figures on an Earlier Year Update (EYU). It has also provided numerous publications surrounding the issue, including this helpful article which explains what the charge is, who it affects and how to settle the issue.


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