POWERS to directly recover debt from taxpayers who persistently fail to pay could net HMRC as much as £365m by the end of 2018/19, according to official estimates.
Projections made in the Budget document show the government expects the move to generate nothing in its first year, £65m in its second, followed by £110m in 2016/17, £110m in 2017/18 and £90m in 2018/19.
The scope for the wrong amount being deducted in error has caused practitioners to query the wisdom of the proposal, but the taxman maintains it will only utilise the powers in cases where the debt it well-established and with series of stringent safeguards in place.
Nearly three out of five complaints made to the taxman in 2010/11 resulted in HMRC admitting fault, according to research conducted by law firm Pinsent Masons in 2012.
More recently, more than a third of taxpayers were found to be at risk of paying the wrong amount of tax due to issuing errors by HMRC, UHY Hacker Young claimed last year. Analysis conducted by the top 20 firm of tax codes sent to its clients revealed that around 37% would have resulted in people paying the incorrect amount of tax.
The ATT had previously expressed concern that the legislation was overly complex and created unnecessary complications within the practical working of the new allowances
Introduced in 2013 to encourage R&D investment, the scheme allows UK businesses to pay only 10% corporation tax on profits derived from any UK or certain EU patents
Yet, KPMG’s annual survey shows that the UK is still an attractive place to do business, despite falling in rankings in tax competitiveness and FDI appeal
Following recent issues with HMRC’s personal tax computation software, Brian Palmer of the AAT questions whether the government’s implementation timeframe for Making Tax Digital is realistic