Misc 5

Autumn Budget 2021: A focus on Tax Risk and Tax Integrity

Simon Crookston, Partner, Corporate Tax
27/10/2021
Misc 5

Buried in the documents published as part of the Chancellor’s Budget statement there are a number of announcements around Tax Integrity with the aim to ensure that businesses and individuals pay the right amount of tax.

In his autumn Budget, the Chancellor continued with the ever-increasing move to ensure that businesses pay the right amount of tax. The Chancellor wants to ensure that HMRC has the resources it needs to continue to bear down on tax avoidance and evasion. Overall, HMRC is seeking to ensure it is able to support taxpayers to get their tax right, be able to deliver a secure and efficient customs border and continue to transform itself into one of the most digitally advanced tax authorities in the world.

In particular, it is noted that the following will be introduced to help HMRC combat non-compliance.

  • An additional £292 million has been allocated across three years for more resources to tackle the tax gap and ensure that those who should pay, do.
  • £55 million will be allocated next year for the Taxpayer Protection Taskforce announced in the spring Budget 2021. This will enable HMRC to continue to pursue those who have abused the government’s COVID-19 support schemes.
  • Making Tax Digital will be expanded to help reduce errors made by businesses. This is expected to generate up to £1.6 billion in additional tax revenues by 2026/27.
  • Through their on-line portal HMRC will in due course deliver new single customer records and accounts to provide simpler, faster access for taxpayers to see and manage all their tax affairs in one place. Hopefully leading to less queries and greater clarity for all taxpayers.
  • £838 million is to be spent in the three years to 2024/25 on critical customs IT, including a new Customs Declaration Service.

Clamping down on promoters of tax avoidance

Not only are HMRC looking to tackle taxpayers that do not pay and declare the right amount of tax, they are also looking to further clamp down on promoters of tax avoidance schemes. As a consequence, in Finance Bill 2021/22, further measures to clamp down on promoters of tax avoidance will also be introduced. The package of measures, which will take effect following Royal Assent, include:

  • allowing HMRC to freeze a promoter’s assets so that the penalties they are liable for are paid
  • deterring offshore promoters by introducing a new penalty on the UK entities that support them
  • the closing down of companies and partnerships that promote tax avoidance schemes
  • supporting taxpayers to steer clear of avoidance schemes or exit avoidance quickly, by sharing more information on promoters and their schemes.

It will be interesting to see how this evolves over the coming months; as the additional funding for HMRC comes into play and as HMRC starts flexing its muscles over time, getting more resources and becoming more technologically enabled to ensure that tax payers are declaring and paying the right amount of tax.

For more information on how Crowe can help assist you in assessing the robustness of your existing compliance procedures, processes and systems, contact Simon Crookston or visit our dedicated Tax Risk services.

Autumn Budget 2021

What do the announcements mean for you and your organisation?

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Businesses must address the processes and controls in place to ensure good tax governance and tax risk management.
How will small and medium businesses be affected by the new rules and what actions you need to take to protect themselves.
Effective tax planning can help with VAT problems seen in advance and negate the many pitfalls.

Contact us

Simon Crookston
Simon Crookston
Partner, Corporate Tax
Kent