#SummerBudget: HMRC funding boost requires big tax take
Advisers welcome £750m HMRC funding boost, but question its ability to recoup billions of pounds in extra tax
THE GOVERNMENT is to pour hundreds of millions of pounds into the taxman, however it will expect a big return on its ‘investment’ – with at least £8bn outlined in extra tax expected to be recouped.
Chancellor George Osborne told a packed commons during the Summer Budget that HM Revenue & Customs would receive an extra £750m in funding, to help it combat a range of avoidance schemes and evasion, along with driving compliance.
But the investment will not allow HMRC, which has suffered a number of departmental cuts in recent years, to put its feet up.
The Budget ‘red book’ outlines a series of increases in tax take that will be expected from the boosted taxman. Over the period of parliament, some £6.6bn extra tax will be recouped in these areas, with a further £3.4bn to be taken in 2020/21.
Key tax take will be from enhanced compliance among large businesses, with more than £2bn targeted over the next six years, with CGT avoidance by private equity and hedge funds at £1.8bn.
Advisers gave the announcement a cautious welcome. Geraint Jones, tax partner at BKL, warned that the tax take seemed “optimistic”.
“While the revenue’s efforts to reduce tax evasion are commendable, their projected figures look optimistic…with in excess of £10bn additional revenues by 2020/21,” said Jones.
“Speaking to the Revenue is practically impossible, so anything that frees up resources can only be a good thing.”
James Hender, partner and head of the private wealth group at Saffery Champness, said: “The Chancellor’s plans for raising tax by further cracking down on anti-avoidance are ambitious. While the chancellor aims to raise £7.2bn there is only so much that changing the law will do. We wait to see whether HMRC will be properly supported in this drive.