New VAT penalty regime and other VAT news

Tax non-compliance during pandemic

Tax non-compliance during the pandemic cost the UK government £9 billion, according to a report from the National Audit Office (NAO).

HMRC redeployed around 1,350 workers to Covid-19 support schemes throughout 2020/21, shrinking the number of those working on tax compliance, the NAO said.

This reduced the tax authority's capacity to investigate people and businesses not paying the correct levels of tax, according to the NAO.

Before the pandemic, tax revenues from HMRC's compliance work were on average 5.2% of its total revenues. This dropped to 4.2% between 2020 and 2022 causing a £9 billion reduction in revenues.

Gareth Davies, Head of the NAO, said:

'HMRC had to move swiftly to reallocate resources to Covid-19 schemes, as the circumstances of the pandemic demanded. However, this directly affected its ability to investigate cases of people and businesses not paying the right tax.

'There is now a risk that more people ultimately fail to pay the right tax or escape investigation or prosecution. It is concerning that HMRC's planning indicates that non-compliance may grow following the pandemic. The next two years are critical, and swift action is likely to be needed to stem potential losses.

'There is little doubt that HMRC's compliance work offers good value for money, but it needs to evaluate its performance more consistently. Improving the effectiveness of HMRC's compliance work can help maximise the amount of money available for public services in a challenging economic context.'

Internet link: NAO website

1.25% increase to NIC and dividend tax rates 

Tax non-compliance during pandemic

Tax non-compliance during the pandemic cost the UK government £9 billion, according to a report from the National Audit Office (NAO).

HMRC redeployed around 1,350 workers to Covid-19 support schemes throughout 2020/21, shrinking the number of those working on tax compliance, the NAO said.

This reduced the tax authority's capacity to investigate people and businesses not paying the correct levels of tax, according to the NAO.

Before the pandemic, tax revenues from HMRC's compliance work were on average 5.2% of its total revenues. This dropped to 4.2% between 2020 and 2022 causing a £9 billion reduction in revenues.

Gareth Davies, Head of the NAO, said:

'HMRC had to move swiftly to reallocate resources to Covid-19 schemes, as the circumstances of the pandemic demanded. However, this directly affected its ability to investigate cases of people and businesses not paying the right tax.

'There is now a risk that more people ultimately fail to pay the right tax or escape investigation or prosecution. It is concerning that HMRC's planning indicates that non-compliance may grow following the pandemic. The next two years are critical, and swift action is likely to be needed to stem potential losses.

'There is little doubt that HMRC's compliance work offers good value for money, but it needs to evaluate its performance more consistently. Improving the effectiveness of HMRC's compliance work can help maximise the amount of money available for public services in a challenging economic context.'

Internet link: NAO website

Budget 2021

Tax non-compliance during pandemic

Tax non-compliance during the pandemic cost the UK government £9 billion, according to a report from the National Audit Office (NAO).

HMRC redeployed around 1,350 workers to Covid-19 support schemes throughout 2020/21, shrinking the number of those working on tax compliance, the NAO said.

This reduced the tax authority's capacity to investigate people and businesses not paying the correct levels of tax, according to the NAO.

Before the pandemic, tax revenues from HMRC's compliance work were on average 5.2% of its total revenues. This dropped to 4.2% between 2020 and 2022 causing a £9 billion reduction in revenues.

Gareth Davies, Head of the NAO, said:

'HMRC had to move swiftly to reallocate resources to Covid-19 schemes, as the circumstances of the pandemic demanded. However, this directly affected its ability to investigate cases of people and businesses not paying the right tax.

'There is now a risk that more people ultimately fail to pay the right tax or escape investigation or prosecution. It is concerning that HMRC's planning indicates that non-compliance may grow following the pandemic. The next two years are critical, and swift action is likely to be needed to stem potential losses.

'There is little doubt that HMRC's compliance work offers good value for money, but it needs to evaluate its performance more consistently. Improving the effectiveness of HMRC's compliance work can help maximise the amount of money available for public services in a challenging economic context.'

Internet link: NAO website

COVID-19 Update 3

Tax non-compliance during pandemic

Tax non-compliance during the pandemic cost the UK government £9 billion, according to a report from the National Audit Office (NAO).

HMRC redeployed around 1,350 workers to Covid-19 support schemes throughout 2020/21, shrinking the number of those working on tax compliance, the NAO said.

This reduced the tax authority's capacity to investigate people and businesses not paying the correct levels of tax, according to the NAO.

Before the pandemic, tax revenues from HMRC's compliance work were on average 5.2% of its total revenues. This dropped to 4.2% between 2020 and 2022 causing a £9 billion reduction in revenues.

Gareth Davies, Head of the NAO, said:

'HMRC had to move swiftly to reallocate resources to Covid-19 schemes, as the circumstances of the pandemic demanded. However, this directly affected its ability to investigate cases of people and businesses not paying the right tax.

'There is now a risk that more people ultimately fail to pay the right tax or escape investigation or prosecution. It is concerning that HMRC's planning indicates that non-compliance may grow following the pandemic. The next two years are critical, and swift action is likely to be needed to stem potential losses.

'There is little doubt that HMRC's compliance work offers good value for money, but it needs to evaluate its performance more consistently. Improving the effectiveness of HMRC's compliance work can help maximise the amount of money available for public services in a challenging economic context.'

Internet link: NAO website

Update on Government schemes in response to COVID-19

Tax non-compliance during pandemic

Tax non-compliance during the pandemic cost the UK government £9 billion, according to a report from the National Audit Office (NAO).

HMRC redeployed around 1,350 workers to Covid-19 support schemes throughout 2020/21, shrinking the number of those working on tax compliance, the NAO said.

This reduced the tax authority's capacity to investigate people and businesses not paying the correct levels of tax, according to the NAO.

Before the pandemic, tax revenues from HMRC's compliance work were on average 5.2% of its total revenues. This dropped to 4.2% between 2020 and 2022 causing a £9 billion reduction in revenues.

Gareth Davies, Head of the NAO, said:

'HMRC had to move swiftly to reallocate resources to Covid-19 schemes, as the circumstances of the pandemic demanded. However, this directly affected its ability to investigate cases of people and businesses not paying the right tax.

'There is now a risk that more people ultimately fail to pay the right tax or escape investigation or prosecution. It is concerning that HMRC's planning indicates that non-compliance may grow following the pandemic. The next two years are critical, and swift action is likely to be needed to stem potential losses.

'There is little doubt that HMRC's compliance work offers good value for money, but it needs to evaluate its performance more consistently. Improving the effectiveness of HMRC's compliance work can help maximise the amount of money available for public services in a challenging economic context.'

Internet link: NAO website

COVID-19 Government schemes to help

Tax non-compliance during pandemic

Tax non-compliance during the pandemic cost the UK government £9 billion, according to a report from the National Audit Office (NAO).

HMRC redeployed around 1,350 workers to Covid-19 support schemes throughout 2020/21, shrinking the number of those working on tax compliance, the NAO said.

This reduced the tax authority's capacity to investigate people and businesses not paying the correct levels of tax, according to the NAO.

Before the pandemic, tax revenues from HMRC's compliance work were on average 5.2% of its total revenues. This dropped to 4.2% between 2020 and 2022 causing a £9 billion reduction in revenues.

Gareth Davies, Head of the NAO, said:

'HMRC had to move swiftly to reallocate resources to Covid-19 schemes, as the circumstances of the pandemic demanded. However, this directly affected its ability to investigate cases of people and businesses not paying the right tax.

'There is now a risk that more people ultimately fail to pay the right tax or escape investigation or prosecution. It is concerning that HMRC's planning indicates that non-compliance may grow following the pandemic. The next two years are critical, and swift action is likely to be needed to stem potential losses.

'There is little doubt that HMRC's compliance work offers good value for money, but it needs to evaluate its performance more consistently. Improving the effectiveness of HMRC's compliance work can help maximise the amount of money available for public services in a challenging economic context.'

Internet link: NAO website

Dividend 2017/18 and 2018/19

Tax non-compliance during pandemic

Tax non-compliance during the pandemic cost the UK government £9 billion, according to a report from the National Audit Office (NAO).

HMRC redeployed around 1,350 workers to Covid-19 support schemes throughout 2020/21, shrinking the number of those working on tax compliance, the NAO said.

This reduced the tax authority's capacity to investigate people and businesses not paying the correct levels of tax, according to the NAO.

Before the pandemic, tax revenues from HMRC's compliance work were on average 5.2% of its total revenues. This dropped to 4.2% between 2020 and 2022 causing a £9 billion reduction in revenues.

Gareth Davies, Head of the NAO, said:

'HMRC had to move swiftly to reallocate resources to Covid-19 schemes, as the circumstances of the pandemic demanded. However, this directly affected its ability to investigate cases of people and businesses not paying the right tax.

'There is now a risk that more people ultimately fail to pay the right tax or escape investigation or prosecution. It is concerning that HMRC's planning indicates that non-compliance may grow following the pandemic. The next two years are critical, and swift action is likely to be needed to stem potential losses.

'There is little doubt that HMRC's compliance work offers good value for money, but it needs to evaluate its performance more consistently. Improving the effectiveness of HMRC's compliance work can help maximise the amount of money available for public services in a challenging economic context.'

Internet link: NAO website

Autumn Budget 2017

Tax non-compliance during pandemic

Tax non-compliance during the pandemic cost the UK government £9 billion, according to a report from the National Audit Office (NAO).

HMRC redeployed around 1,350 workers to Covid-19 support schemes throughout 2020/21, shrinking the number of those working on tax compliance, the NAO said.

This reduced the tax authority's capacity to investigate people and businesses not paying the correct levels of tax, according to the NAO.

Before the pandemic, tax revenues from HMRC's compliance work were on average 5.2% of its total revenues. This dropped to 4.2% between 2020 and 2022 causing a £9 billion reduction in revenues.

Gareth Davies, Head of the NAO, said:

'HMRC had to move swiftly to reallocate resources to Covid-19 schemes, as the circumstances of the pandemic demanded. However, this directly affected its ability to investigate cases of people and businesses not paying the right tax.

'There is now a risk that more people ultimately fail to pay the right tax or escape investigation or prosecution. It is concerning that HMRC's planning indicates that non-compliance may grow following the pandemic. The next two years are critical, and swift action is likely to be needed to stem potential losses.

'There is little doubt that HMRC's compliance work offers good value for money, but it needs to evaluate its performance more consistently. Improving the effectiveness of HMRC's compliance work can help maximise the amount of money available for public services in a challenging economic context.'

Internet link: NAO website

Changes to flat-rate VAT in more detail with examples

Tax non-compliance during pandemic

Tax non-compliance during the pandemic cost the UK government £9 billion, according to a report from the National Audit Office (NAO).

HMRC redeployed around 1,350 workers to Covid-19 support schemes throughout 2020/21, shrinking the number of those working on tax compliance, the NAO said.

This reduced the tax authority's capacity to investigate people and businesses not paying the correct levels of tax, according to the NAO.

Before the pandemic, tax revenues from HMRC's compliance work were on average 5.2% of its total revenues. This dropped to 4.2% between 2020 and 2022 causing a £9 billion reduction in revenues.

Gareth Davies, Head of the NAO, said:

'HMRC had to move swiftly to reallocate resources to Covid-19 schemes, as the circumstances of the pandemic demanded. However, this directly affected its ability to investigate cases of people and businesses not paying the right tax.

'There is now a risk that more people ultimately fail to pay the right tax or escape investigation or prosecution. It is concerning that HMRC's planning indicates that non-compliance may grow following the pandemic. The next two years are critical, and swift action is likely to be needed to stem potential losses.

'There is little doubt that HMRC's compliance work offers good value for money, but it needs to evaluate its performance more consistently. Improving the effectiveness of HMRC's compliance work can help maximise the amount of money available for public services in a challenging economic context.'

Internet link: NAO website

Autumn Statement 2016

Tax non-compliance during pandemic

Tax non-compliance during the pandemic cost the UK government £9 billion, according to a report from the National Audit Office (NAO).

HMRC redeployed around 1,350 workers to Covid-19 support schemes throughout 2020/21, shrinking the number of those working on tax compliance, the NAO said.

This reduced the tax authority's capacity to investigate people and businesses not paying the correct levels of tax, according to the NAO.

Before the pandemic, tax revenues from HMRC's compliance work were on average 5.2% of its total revenues. This dropped to 4.2% between 2020 and 2022 causing a £9 billion reduction in revenues.

Gareth Davies, Head of the NAO, said:

'HMRC had to move swiftly to reallocate resources to Covid-19 schemes, as the circumstances of the pandemic demanded. However, this directly affected its ability to investigate cases of people and businesses not paying the right tax.

'There is now a risk that more people ultimately fail to pay the right tax or escape investigation or prosecution. It is concerning that HMRC's planning indicates that non-compliance may grow following the pandemic. The next two years are critical, and swift action is likely to be needed to stem potential losses.

'There is little doubt that HMRC's compliance work offers good value for money, but it needs to evaluate its performance more consistently. Improving the effectiveness of HMRC's compliance work can help maximise the amount of money available for public services in a challenging economic context.'

Internet link: NAO website