New measures on tax administration

16 March 2016

Although the Budget was wide ranging and contained a lot of measures, there were few entirely new measures in the area of tax administration.

However, there is renewed focus on avoidance and evasion with combined measures due to produce £12bn yield by 2020. Much of this relates to substantive measures such as action against disguised remuneration and loss restrictions.

With regards to the tax system itself, as well as restating previously announced measures such as the 60% General Anti-Abuse Rule (GAAR) penalty, there is a new proposal mentioned to make it easier to charge penalties in cases of avoidance. No detail is given yet, but avoidance is notoriously difficult to define and this does have the potential to penalise those who have taken reasonable care over their tax affairs.

Operationally, the investment of £71m in improving HMRC's services (including a 24 /7 response system) is welcome particularly in the context of reductions in the HMRC budget from £3.3bn to £2.9bn by 2020.

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