SOME OF HMRC’S recent initiatives have been given the misnomer “tax amnesty”. It must be said that HMRC themselves have not done this, while this magazine has.
The latest figures released today suggest that HMRC’s amnesty carrot is unappealing and probably in the value range. The menacing stick, however, looks like it will do the damage.
Indicative of this is the amount of money they brought in from the first stage of their plumbers campaign through voluntary disclosures – £328,756, from around 600 people. To put this in context, some of the 600 investigations that have been launched by the taxman are worth up to £150,000 each.
Despite HMRC taking stick for the low uptake of voluntary disclosures, this should not be a massive surprise. A long-time tax evader is unlikely to be seduced by the 20% penalty on offer – and nor would HMRC expect them to be. The voluntary stage – the so-called amnesty – was a warning shot, a chance for HMRC to say “we warned you”. Of course, it also yields an easy £328,000, but this will not help it raise the extra £7bn a year that ministers have called for.
The second stage of actively pursuing offenders is the real revenue generator and it is at this point that the taxman’s results should be judged. The 600 investigations are a good start. Now, it only needs to yield some actual revenue.
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