“New £2.6bn tax compliance crackdown can’t work if existing tools are barely being used”: TaxWatch Budget analysis
The Budget’s third-largest tax pledge relies on a UK tax authority that is suffering from recruitment delays and unfinished IT systems. Just 26 of 6,700 extra compliance/debt staff promised by Chancellor are so far in post. A key tax to counter digital giants’ profit-shifting will remain despite Trump pressure, but the Budget has missed opportunities to tackle abused corporate reliefs now as large as the child benefit budget.
Staffing delays could threaten Chancellor’s £15 billion tax revenue plans
Though it’s been absent from the pre-Budget debate, the Chancellor’s second-biggest revenue-raising policy so far is a plan to boost HMRC’s personnel & systems: recruiting 6,700 more staff to chase an extra £15.5 billion of evaded tax and tax debts. Yet TaxWatch has found that just 26 of these promised new staff are yet in post, calling into question a key plank of the government’s tax and spend plans.
In the run-up to a make-or-break Budget, TaxWatch’s new State of Tax Administration report takes a deep dive into how HMRC has been running the tax system over the last year.
Has the Chancellor agreed a $6 billion tax break for US big tech?
A tax deal for US multinationals backed by Chancellor Rachel Reeves could hand US companies a $40 billion annual tax break next year, including some $6 billion for US tech giants, according to new analysis from TaxWatch.
Big fish, little fish…
With limited resources, how should the UK prioritise different types and targets of tax enforcement?
The gap in the Tax Gap
Quietly buried in HMRC spreadsheets released today is the news that the UK Tax Gap is consistently much bigger than HMRC previously said. New evidence suggests that the government may be under-estimating by several billion pounds the amount of income hidden offshore, and non-compliance amongst the largest and wealthiest taxpayers.
Donald Trump claims the UK’s Digital Services Tax overwhelmingly targets US tech giants. New data obtained by TaxWatch shows it doesn’t.
From the White House to the tech sector, the UK’s Digital Services Tax has been described as a discriminatory ‘tariff’ almost entirely targeting large US internet companies. New statistics show that’s not quite true.
Anything to declare? HMRC slips out new R&D relief disclosure facility on New Year’s Eve…
Businesses who overclaimed R&D tax relief invited to disclose and repay with HMRC’s new disclosure facility, although it might not prove as popular as the Government hopes
New statistics show £300m lost to offshore tax gap on over 7million accounts held overseas likely to be gross underestimate
HMRC’s first estimate of the offshore tax gap for 2018, seems a wild underestimate at just £300 million based on questionable methodological choices.
New statistics show HMRC’s clampdown on R&D claims beginning to take effect
Latest HMRC figures show the cost of R&D relief claims increasing but in relation to fewer claims being made for 2022-23. This implies HMRC’s compliance changes are discouraging claims that are less likely to be qualifying, especially those of lower value or in particular sectors.