Figures revealed in HM Revenue & Customs’ (HMRC) annual report show that the taxman hauled in £517.7bn from the 2013/14 tax year, with a record amount brought in through income tax and the department’s continued crackdown on tax evasion and avoidance.
The 2014/15 report also showed that the department raked in a record £26.6bn in compliance receipts, of which accelerated payment notices brought accounted for £568m. This was a much higher figure than the £210m the department expected. This was because, under new powers given to the taxman, HMRC is able to make taxpayers pay disputed tax in advance, rather than waiting for the outcome of a tax tribunal ruling.
Individuals suspected of tax avoidance have 90 days to pay the amount the taxman says they owe before the department challenges them in court. However, if they are subsequently found not guilty they are repaid the money including interest.
Last year HMRC issued around 10,000 such payment notices, which brought in the £568m. Meanwhile, this year, the taxman expects to issue 64,000 accelerated payment notices to individuals and businesses involved in tax avoidance schemes, so the take should be much higher.
In addition, for the first time, HMRC has issued 379 ‘follower notices’ to tax avoidance users. These notices urge tax avoiders to pay the disputed tax they owe after court rulings in similar cases that find in the taxman’s favour. In 2014/15 HMRC issued follower notices with a collective value of more than £170m.
The report also revealed that almost 90% of complaints made to the adjudicator about HMRC were upheld in part or in full in 2013/14. These amounted to 2,311 cases, with just over 53% upheld in full. Responding to criticism over its handling of calls and letters, the department has said that it is allocating £45m this year to improving its customer service.