AS MUCH AS £400M of tax could have been underpaid by directors and senior executives of some of the UK’s largest companies, a rise of 43% on the £280m under investigation last year.
The data, obtained under the Freedom of Information Act by law firm Pinsent Masons, is indicative of a steady rise on compliance work undertaken by HM Revenue & Customs, it said, as well as investigations into avoidance linked to the 50p tax rate and the temporary special tax on bank bonuses.
The £400m under scrutiny comprises PAYE and National Insurance contributions.
Pinsent Masons partner Jason Collins said HMRC has increased its focus on executives as they are a potentially lucrative source of extra tax revenue.
He said: “HMRC has taken a particular interest in cases where income or an individual’s role at a company has been structured to reduce their tax burden, particularly their PAYE or National Insurance contributions.
“The introduction of new taxes for higher earners, such as the 50p marginal tax rate, mean HMRC will be on increased alert for any new forms of tax avoidance. The 50p tax brought in less than expected, so this may have set alarm bells ringing for tax investigators.”
He was quick to point out, though, that tax is not necessarily missing simply because HMRC believes it is.
“[The] £400m is just the figure that HMRC estimates might be at stake, and the amount HMRC will actually collect through their investigation work will be much lower,” said Collins.
An HMRC spokesman said: “HMRC ensures everyone pays the tax they owe but we focus on areas of greatest risk of tax loss and this approach is working – last year alone we brought in nearly £7 billion in additional tax from policing the tax rules covering large businesses.”
HMRC has outlined a change in VAT policy to the treatment of dwellings that have been formed from either the construction of new buildings, or from the conversion of non-residential buildings
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I will feel slightly awkward when I write to the client who is about to receive a large invoice from the PAYE expert, offering him the fee protection going forward