HM Revenue & Customs is celebrating its best year ever, having collected a record £23.9billion in additional tax revenue through its investigations in the last 12 months.
The haul, which is the sum HMRC has collected from those who pay on time and those who tried not to, is up by both £3.2bn on the previous tax year and £9bn three years ago.
It is also £1bn up on the target set out at Autumn Statement 2013, which unveiled “the largest package of measures” in the current parliament to tackle avoidance, evasion, fraud and error.
Since then, HMRC has chalked up 30 wins in the courts against taxpayers it deemed to be avoiding tax, protecting the exchequer from £2.7bn in tax from going unpaid.
Overall, and in light of HMRC winning a total of 94 avoidance cases between April 2010 and March 2014, the tax authority’s success rate on such cases currently stands at 80 per cent.
The crackdown on avoidance has served to reduce the number of new marketed tax avoidance schemes registered under DOTAS by more than 75 per cent.
In fact, in the 2009-10 tax year there were 116 arrangements registered under Disclosure of Tax Avoidance Schemes, compared to just 28 in 2013-14.
Measures introduced to target disguised remuneration have also paid off for HMRC, as it says almost £3.8bn in revenues will be protected as a result between 2011-12 and 2015-16.
The department further projected that the General Anti-Abuse Rule, introduced in 2013, should net £235m in revenues between both 2014-15 and 2017-18.
As to sums already collected, the taxman has raked in £853m from high net worth individuals; over £1bn from criminals and £31bn from large businesses (since April 2010).
Some of these parties were among the 2,650 prosecutions that HMRC brought between April 2010 and this year – when it made a record number of annual prosecutions (915).
Although actual convictions for the 2013-14 tax year came in shy of this total, approximately 700, their number is also at a record high, having increased consecutively since 2010-11.
“We set HMRC ambitious targets”, reflected Treasury Minister David Gauke.
“The figures published today demonstrate that HMRC is successfully meeting these challenges. It also sends a clear signal – HMRC will pursue those seeking to avoid their responsibilities and will collect the taxes that are due.”
The government’s backing of HMRC is underlined by the 42 changes to tax law that have been introduced since March 2010, to ‘close loopholes and deter avoidance.’
But pointing to SMEs, the Revenue acknowledged that for many such businesses “non payment of tax is not a deliberate choice, it’s a short-term cashflow problem.”
The department added: “We actively support SMEs in these circumstances with Time To Pay arrangements. More than 90 per cent of debt in Time To Pay arrangements is recovered. A harder line could push small businesses and individuals into insolvency, which could lead to less debt being recovered.”
However, the scheme is no longer open to firms who pay dividends; is harder to gain approval for if used more than once and agreements for it are no longer made public, leading to fears it is being wound down.