The Government is continuing its commitment to ensuring a fairly administered tax system by implementing a substantial package of HMRC administration, compliance and debt collection measures, aiming to generate an additional £2.4 billion by 2029-30. These initiatives are designed to tackle various facets of the tax gap (the difference between the theoretical tax liability and what is actually reported), which was estimated at 5.3 percent in 2023-24.
The Government is taking a multi-pronged approach by targeting various areas which would all work towards closing the tax gap. Items of focus include:
- Additional reporting requirements for corporate multinational transfer pricing arrangements;
- Making use of third-party data by acquiring it more regularly in relation to interest and card sales, and the introduction of the Crypto-Asset Reporting Framework;
- Increased penalties for corporate tax late filing;
- Investing in and expanding HMRC’s debt management capacity with partnerships and additional staff;
- Enhancing HMRC’s powers and sanctions against tax advisers who facilitate non-compliance;
- Targeting promoters of marketed tax avoidance;
- Tackling rogue directors by investing in insolvency specialists;
- Clarifying the tax treatment of image rights payments linked to employment that are treated as employment income; and
- Introducing new powers to compel taxpayers to correct errors in tax filings.
